The New York Times Co. posted a surprise loss on Thursday as the economic downturn added to pressure on newspaper advertising and left the publisher with worse-than-expected quarterly results.
Shares of the company, which recently took steps to appease unhappy shareholders and avert a possible proxy battle, fell 1.9 percent in early trading on the New York Stock Exchange.
The Times, which also owns the Boston Globe and more than a dozen small U.S. daily papers, has been trying to find ways to fight a persistent drop in advertising revenue, building its Internet business and cutting costs.
"Advertising revenues decreased in the quarter as weaker economic conditions compounded the effects of secular change in our business," Chief Executive Janet Robinson said in a statement. "While this is a challenging time for the media industry, we are diligently managing our business for the long term."
The company reported a first-quarter net loss of $335,000, or breakeven on a per share basis. A year ago, it posted net income of $23.9 million, or 17 cents per share, and income from continuing operations of 14 cents per share.
The results this year included a 7-cent-per-share charge to write down assets and a 3-cent-per-share gain for a tax adjustment. Excluding special items, earnings per share from continuing operations fell to 4 cents from 17 cents in the first quarter of 2007.
Revenue dropped 4.9 percent to $747.9 million, short of the $754.06 million that analysts had expected, according to Reuters Estimates. Analysts forecast earnings of 15 cents a share, though because of buyout costs and equity awards it was not immediately clear if that figure was comparable to the 4 cents a share the Times reported.
The Times said advertising revenues from its news media division dropped 10.6 percent. While ad revenue from the Internet continued to rise -- up 16 percent in the quarter -- that still failed to compensate for the drop on the print side.
Stuck with steady advertising declines, the Times, like other publishers, is concentrating on trimming costs.
The company said earlier this year it would cut 100 newsroom jobs at its flagship paper, offering voluntary buyouts. However, as not enough people have taken the buyouts, some layoffs are expected, according to a report in the Wall Street Journal this week.
Some investors have publicly complained about the publisher's response to the tough newspaper business, with hedge fund Harbinger Capital Partners and investment firm Firebrand Partners urging it to sell a number of its properties, including its smaller local newspapers, and move more aggressively into digital properties.
The dissident shareholder group also demanded to have more seats on the board. To avert a possibly proxy fight, the company agreed last month to raise the number of board seats by two and give them to the group.
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