The New York Times' (NYT) Bottom Line Continues Declining

The New York Times Company (NYT) plunged last week, after the company reported first quarter earnings that showed weakness across all print divisions. For its first quarter, the New York Times earned $0.2 per share, or $3.1 million, down from the $0.28 per share, or $42.1 million, it reported in the prior year quarter. Income from continuing operations dropped by more than half, from $8.7 million to $3.1 million.

The company's problems are well documented, and have become the textbook example of being left being a technological curve, as the Internet and social media have increasingly rendered print media obsolete. Daily Chart
The New York Times' total revenue slid 2% to $465.9 million. Its advertising revenue dropped 11.2% to $191.2 million. Print advertising at its three newspapers - The New York Times, The Boston Globe and the International Herald Tribune - plunged an average of 13.3%. The Times had announced earlier this year that it planned to sell The Boston Globe. However, the company's digital advertising revenue, which it had been placing high hopes on, also declined 4%. The company attributed these across the board advertising declines to reduced advertising budgets from movie studios and real estate companies. The company's main bright spot was its circulation revenue, which rose 6.5%, which included both print and digital subscriptions. Total paid subscribers, which include print, digital and e-reader editions, rose 49% year-on-year to 676,000. Digital subscriptions at The Boston Globe and its online edition rose 50% to 32,000 subscribers. CEO Mark Thompson hinted at future turnaround initiatives, stating, "We will be rolling out other strategic initiatives designed to further leverage The Times brand and newsroom to create new products and services for a wider range of customers, domestically and around the globe." Thompson stated that he would offer a tiered pricing system, which only charged readers for the amount of content they read, rather than a flat subscription rate. Premium customers would receive incentives, such as access to events at The Times. The company also intends to rebrand its European edition, The International Herald Tribune, as The International New York Times, and its website will be also be redesigned to cater to a broader international audience. The company is also exploring other online initiatives, such as e-commerce and games, as possible avenues of revenue growth. The New York Times has slimmed down drastically over the past decade, selling off local newspapers and real estate to preserve its top and bottom line growth. The New York Times currently trades at 20 times forward earnings with a negative PEG ratio, indicating flat to negative growth ahead. It does not currently pay a dividend. Other News About NYT Times Co. Profit Falls; New Subscription Model is Set Will a new subscription-based model save The Times? The New York Times: Earnings Down 93 Percent The New York Times' bottom line plummets. Other Stocks in the News It's Time to Stop Worrying About Nokia Should investors buy Nokia at current levels? Are These Two Giants Set to Merge? Are Yahoo and Apple about to team up? Copyright 2013 by, Inc. InvestorGuide has no control over the sites we link to, is not affiliated with these sites, and cannot take responsibility for their quality or suitability. The news, analysis, commentary and profile information is not meant to be comprehensive, and the data provided is not guaranteed to be accurate. WebFinance Inc., the publisher of this newsletter, is not a registered investment advisor or a broker/dealer. This is not a stock recommendation newsletter but rather a source for investment ideas, and we encourage you to fully research any company before considering investing. The opinions expressed herein are those of the author and do not necessarily represent the views of nor are they endorsed by WebFinance Inc. No employee of WebFinance has owned or currently owns any shares in the company described above. The above is neither an offer nor solicitation to buy or sell any securities. The trading of securities may not be suitable for all potential readers of this newsletter, and the purchase of stocks mentioned in this newsletter may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities or making investment decisions. We are not responsible for claims made by advertisers and sponsors. Anyone who makes decisions based on what they read here does so at their own risk and cannot hold WebFinance Inc. (DBA, Inc.) or its employees responsible.

Published on Apr 30, 2013
By Leo Sun
Leo Sun
Leo Sun is a freelance finance writer and position trader. He focuses on a combination of value and momentum investing, with a strong interest in the trading philosophies of Warren Buffett and Peter Lynch. Leo also has experience writing articles to help small business owners acquire loans and manage their finances. He regularly contributes to the Stock of the Day analysis.

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