The New York Times Co. reported better first-quarter earnings than expected Thursday, as lower costs and a smaller drop in advertising revenue helped reverse a loss in the same period a year earlier.
Advertising revenue fell 6.1 percent, the smallest decline in more than a year.
"As the quarter progressed we saw acceleration in the rate of advertiser spending across our newspapers, websites and other platforms, reflecting a firming of economic conditions," CEO Janet Robinson said in a statement.
In a positive sign, Robinson told analysts on a conference call that the company's newspapers saw advertising revenue grow 4 percent in March from the same month a year ago. And the company said ad revenue was up in April as well, though it did not give a specific figure.
Nonetheless, shares of the Times Co. fell 31 cents, or 2.4 percent, to $12.43 in midday trading Thursday.
Many analysts had already expected the Times Co. to report a smaller advertising decline after results from several major newspaper publishers showed the slump was easing in the first quarter. Last week, Gannett Co., the nation's largest newspaper publisher, also reported its smallest drop in ad revenue in more than a year: 8 percent.
"Gannett maybe spoiled the party for the others," Benchmark Co. media analyst Edward Atorino said. "It was such a good quarter that it maybe raised expectations."
Shares of another newspaper publisher, McClatchy Co., plunged 14 percent in midday trading. McClatchy, which publishes The Miami Herald, The Sacramento (Calif.) Bee and other newspapers, reported a net income of $2.2 million on Thursday, helped by a one-time accounting gain related to newspapers that it sold a few years ago.
McClatchy said its ad revenue was down 11.2 percent from the same quarter a year earlier, better than the 20.5 percent decline recorded in the final three months of 2009.
Some of the deceleration stems from more favorable comparisons. For instance, the Times Co.'s ad revenue plunged by 27 percent in last year's first quarter, dramatically lowering the bar that it must measure up to this year. But the improving economy also appears to be encouraging advertisers to spend more money after hunkering down through the worst of the recession last year.
Online advertising revenue rose 18.3 percent, helping to offset a 12.3 percent decline in print ad revenue at the Times Co. But because Internet ads make up only a small portion of total revenue, overall ad revenue still fell 6.1 percent. Circulation revenue rose 3.5 percent because of higher subscription and newsstand prices, and total revenue fell 3.2 percent, to $588 million.
The Times Co., which owns The New York Times, The Boston Globe, the International Herald Tribune and 15 other daily newspapers, earned $12.8 million, or 8 cents per share, in the first quarter. That compared with a loss of $74.5 million, or 52 cents per share, in the same period in 2009.
Stripping out one-time items, including a $6.4 million after-tax gain from the sale of assets and a $10.9 million charge related to the recent U.S. health care overhaul, earnings came to 11 cents per share.
The results exceeded Wall Street forecasts. Analysts surveyed by Thomson Reuters expected income of 5 cents per share and revenue of $578 million.
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