Earnings: NYTCO Q3 Profits Gain 6.7 Percent; Revs Up 2 Percent; Ad Revs Fall Slightly
Citing a particularly strong September, The New York Times Company ( NYSE: NYT ) said Q3 net income rose 57.1 percent to $13.4 million from $14.5 million year-over-year. Meanwhile, revenues were up a modest 2 percent to $754.4 million from $739.6 million for the quarter, with online revenues gaining 26.5 percent to $79.7 million from $63 million. The NYTCO also posted higher earnings per share from continuing operations of $.10, compared with $.06 in Q306. In a statement before the conference call with analysts and investors, Janet Robinson, president and CEO, credited strong national advertising, healthier circulation revenues and reined in costs as factors driving the NYTCO’s overall earnings picture in Q3. In particular, Robinson said revenue growth was promoted by new print and online products. Specific highlights from the report included..tons more after the jump, including notes from the conference call. -- Revenue Break Out: Advertising revenues fell 0.1 percent; circulation revenues climbed 3.9 percent; and other revenues rose 11.5 percent. -- News Media Group: The segment’s revenues grew 1.2 percent to $729.6 million from $721.3 million. Advertising revenues slid 1.4 percent, due to weakness in advertising at the New England and Regional Media Groups. Healthy ad growth in advertising at The New York Times Media Group helped to offset those declines. In particular, classified advertising revenues decreased across the News Media Group, principally due to softness in real estate advertising. Operating profit for the segment rose 42.9 percent to $33.1 million from $23.2 million. -- Total About Group: Acquisitions from last year exacted both a positive and negative force in the About.com segment’s Q3 earninngs. The group’s revenues were up 34.9 percent to $24.7 million from $18.3 million thanks to rising display and cost-per-click advertising. Revenues associated with the acquisition of reviews site ConsumerSearch.com also played a part in those overall increases. About’s operating costs, however, also grew, increasing 54.8 percent to $18.4 million from $11.9 million, due in part to the acquisition, as well as larger content costs. Operating profit decreased 2.0 percent to $6.3 million from $6.4 million. More to come. Earnings release | Webcast (10:30 a.m. EDT) -- Update: A major part of the Times’ strategic initiatives in Q3 was the building out of health and business verticals online. That, along with other new web content, helped boost revenues, Robinson said, opening up the conference call. As she said in Q2, there is an emphasis on creating new mobile apps. The real estate mobile app introduced in Q3 represents more of what’s to come. In addition to real estate, movie times and stock quotes were also rolled out for the paper’s mobile site. -- Classifieds were down due to housing slump. Automotives and recruitment were also down. -- About.com’s group operating margins are expected to grow in Q4, in line with seasonal ad spend. -- Overall, the Times’ various websites attracted 44.2 million uniques in September, up 12 percent year-over-year. Digital business accounted for 10.6 percent of the company’s Q3 revenues, versus 8.5 percent in Q306. About 46 percent of digital revs came from display ads, 23 percent from classifieds, 15 percent from search and 16 percent from other sources, such as online archives. -- Times Select was a “good, $10 million a year business,” said Martin Nisenholtz, SVP, Digital Operations. But the decision to pull the plug on the online subscription service after two years is being viewed as “the best way to go, given the tremendous uptick from SEO, as well as internet ads over the long term,” Nisenholtz added. “We see the benefits from those categories outpacing the revenue stream from Times Select.” -- Discrepancies: We mentioned a story from this weekend’s Times that showed continuing differences between media companies internal traffic numbers and those compiled by ComScore (NSDQ: SCOR) and Nielsen//NetRatings. One of the analysts asked if the Times’ site experienced similar divergences in measuring monthly uniques, noting that many readers might be viewing the site from work, where their IP address might be blocked by a firewall. Nisenholtz: “The answer is yes, we’ve seen this for years. It’s been a particular problem for news websites, especially for the NYT website, because it skews heavily into workplace locations, as well as education and government institutions. Intractable issue over a long time. We obviously don’t control these companies and they will do what they do. That said, we, along with the rest of the industry have been working through the Internet Advertising Bureau, and are trying to bring a great deal of pressure to bear on getting ComScore and Nielsen//NetRatings numbers to square more accurately with what we think we’re generating, in terms of usage.”
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