New York Times revenue beats estimates, despite writedown
(Reuters) - Higher paper and digital subscriptions lifted quarterly revenue at the New York Times Co (NYT.N), even after the company wrote down the value of its Internet property, About.com.
The publisher of the New York Times and the Boston Globe said on Thursday second-quarter revenue grew almost 1 percent to $515.2 million as circulation revenue climbed 8 percent. That exceeded analysts' average expectation of revenue of $510.9 million, according to Thomson Reuters I/B/E/S.
Total paid digital subscriptions for NYTimes.com and BostonGlobe.com climbed 13 percent to 532,000 as of March 18.
Shares of the company leapt after the results were released, and were up about 10 percent at $7.75 in midday trading.
"Circulation revenue helped the company achieve modest revenue growth," said Jocelyn MacKay, an analyst with Morningstar.
The company took a $194.7 million non-cash goodwill charge for the About Group and reported a net loss of $88.1 million. The New York Times bought the About Group in 2005 for about $410 million.
Still, there are troubling signs for investors and analysts, as the company has been without a CEO for seven months and continues to suffer from dwindling ad revenue.
New York Times Co Chairman and Acting CEO Arthur Sulzberger Jr. said he would have "more to share" about the long search by the end of the quarter.
"Our new CEO must have strong business and digital management skills and understand the power of brand," Sulzberger said on a call with analysts.
Excluding severance costs and the About Group writedown, the company reported earnings per share of 14 cents, beating analysts' estimates by a penny, according to I/B/E/S.
Print advertising revenue at its news properties fell 8 percent while digital advertising revenue slid almost 2 percent.
Including the About Group, digital ad revenue fell 4 percent.
"(About.com)is dragging everything down, which is concerning for how small About Group is," MacKay said.
About.com is a website that provides expert answers that are geared to appear high in search queries. In turn, the company sells advertising against those results.
That division has run into trouble mainly because of changes made by Google Inc (GOOG.O) to its search algorithm to return high-quality results.
At the About Group, revenue fell almost 8 percent due to decreases in both cost-per-click and display advertising. The company cited competition and the weak economy for the display advertising revenue declines.
The company said total ad revenue trends in the third quarter are expected to improve from the second quarter because of digital ad sales.
(Editing by Bernadette Baum)