N.Y. Times Operating Net Dives in Quarter
New York Times Co. said earnings from continuing operations plunged 45% to $16.6 million in the first quarter, because of the effects of a regional recession on the company’s flagship newspaper, the cost of new printing plants and the acquisition of McCall’s magazine.
The company said revenue for the period was $431.2 million, up 2%. Newspaper revenue fell to $334 million from $343 million, or about 3%.
Along with other newspaper companies, the New York Times has been hit by an industry recession that started in the Northeast in late 1988 and has lately begun spreading to other parts of the country. Contributing to the industry’s problems has been a series of mergers and financial problems in the retail industry, including last January’s bankruptcy filing by the Allied Stores and Federated Department Stores chains.
The paper said about 72% of the earnings drop was due to the expense of the McCall’s acquisition, the costs of building a newspaper production plant for the Times in Edison, N.J., and for the company’s Gwinnett Daily News in Georgia. Excluding those factors, per-share earnings would have been down 5 cents, to 35 cents, Arthur Ochs Sulzberger, the company chairman and chief executive, said in a statement.
The stock reacted little to the announcement, closing at $22.75, off 75 cents on the American Stock Exchange. “It’s no secret the (eastern) markets are in a state of depression,” said Ed Atorino, analyst with Salomon Bros. investment firm in New York.
Advertising linage for the New York Times fell 11.8% for the quarter, compared to the like period of 1989. The company said about 75% of the decline was in the help wanted and real estate categories.
Advertising volume for the company’s 35 regional newspapers decreased 2.5%, compared to the first quarter of 1989.
J. Kendrick Noble, publishing analyst for the Paine Webber investment firm, noted that the company had predicted that advertising linage would be down for 1990 as a whole.
Circulation of the New York Times for the six months that ended March 31 reached a record 1.15 million copies on weekdays, up 33,000 copies; Sunday circulation was 1.7 million, up 42,000 copies.
The company’s magazine group posted an operating loss of $3.8 million for the first quarter, contrasted with an operating profit of $700,000 in 1989. The company said the loss was primarily due to the acquisition of McCall’s, which the firm purchased in July, 1989, for an estimated $100 million.
