* Q3 adj loss of 1 cent vs. Wall St view EPS 8 cents
* Revenue down almost 1 pct, misses estimates
* Shares fall 22 pct
(Adds link to Breakingviews column, executive comment; updates
By Jennifer Saba
Oct 25 The New York Times Co posted
worse-than-expected results on Thursday as advertisers cut
spending on both print and digital outlets, sending its shares
down 22 percent.
The weak quarterly earnings came as a scandal is unfolding
at Britain's public broadcaster the BBC, whose former head Mark
Thompson is due to take the helm at the New York Times Co as
president and CEO on Nov. 12.
New York Times Co Chairman Arthur Sulzberger Jr. told
analysts on a conference call on Thursday that he supported
The British Broadcasting Corp has been damaged by the
accusations of sexual abuse of young girls and women by a late
TV host, Jimmy Savile. The scandal also involves a BBC news
program on Savile that was shelved.
Sulzberger said Thompson, who served as the director general
of the BBC until September, "provided a detailed account" of his
involvement with the program and is starting as planned.
"I am satisfied that (Thompson) played no role in the
cancellation of that segment," Sulzberger said. "Our opinion ...
remains that he abides by high ethical standards and is the
ideal person to lead our company."
New York Times Public Editor Margaret Sullivan, who writes
about issues affecting the newspaper, has questioned whether
Thompson is fit to serve as CEO. He has not been implicated in
Earlier, the company reported that revenue slipped almost 1
percent to $449 million, missing analysts' estimate of $479.23
million, according to Thomson Reuters I/B/E/S.
Adjusting for severance costs and other special items, the
company a quarterly loss of 1 cent per share, well below
expectations of earnings of 8 cents per share.
A 7.4 percent rise in circulation revenue, helped by the
company's digital subscription plans, could not offset a
persistent slump in advertising sales.
"It wasn't a nice quarter on revenue," said Edward Atorino,
an analyst with Benchmark Co. "The advertising numbers look
terrible. I thought they might do a little better. They are
caught up in the downslide like everybody else."
The stock tumbled 22 percent to close at $8.31 on the New
York Stock Exchange.
DIGITAL REVENUE DROPS
Print ad revenue, coming primarily from its namesake
newspaper and the Boston Globe, dropped almost 11 percent from a
year earlier - an even steeper decline than the previous
Digital ad revenue, once a bright spot for the company, fell
The company attributed the declines to the "challenging
economic environment, ongoing secular trends and an increasingly
complex and fragmented digital advertising marketplace."
Advertising revenue at The New York Times depends largely on
national accounts from sectors like telecommunications and
technology that use the newspaper to reach people across the
"I think that really reflects that national newspaper
revenue is much more exposed to secular pressures than the local
retailer," said Leo Culp, an analyst with Citi.
The trend of declining national ad revenue was apparent at
Gannett Co, the largest U.S. newspaper chain, and its
national newspaper USA Today, a competitor to the Times.
While Gannett turned in better-than-expected results last
week, national advertising, primarily through USA Today, was
down almost 8 percent at its U.S. newspapers.
Advertising is expected to remain sluggish at the New York
Times this quarter - typically the strongest one for the
newspaper industry as it is buoyed by holiday spending.
"We are hearing from business leaders that they are
extremely concerned, and the lack of business confidence is
growing in many, many segments," said Denise Warren, the
company's chief advertising officer, on the call.
Paid subscribers to the digital editions of The New York
Times and sister paper International Herald Tribune increased 11
percent and totaled 566,000.
Once a sprawling media conglomerate, The New York Times has
tightened its focus and shed assets. Over the past year, it sold
a group of newspapers in the U.S. Southeast and in California,
digital property About Group and stakes in sports ventures
including the Boston Red Sox and Liverpool Soccer Club.