New York Times Swings to Loss in the Quarter

New York Times Co. swung to a second-quarter loss because of costs to streamline its international operations and declines in print and digital advertising.

While digital subscriber growth remained robust, rising 22% from a year earlier, Chief Executive Mark Thompson said that "advertising was tougher in the quarter, particularly on the print side."

Advertising revenue fell 12% in the second quarter, offsetting an increase of 3% in its circulation revenue.

Digital advertising fell 6.8%, declining for a second consecutive quarter, as weaker display advertising sales offset growth in branded content, mobile and programmatic advertising. Print advertising fell 14%.

"We expect a marked improvement in digital advertising in the third quarter," Mr. Thompson said on a call with analysts. "But we do not expect print advertising headwinds to alleviate."

New York Times shares were down 1.5% to $12.60 in midday trading.

Mr. Thompson said the company expects digital advertising to post double-digit percentage growth in the second half of the year, compared with a year earlier, noting there has been a turnaround already this month.

In April, the paper announced that it would cut 70 jobs and move some editing and production operations from Paris to New York and Hong Kong as part of a restructuring of its international print edition operations. More than 50 union-covered employees in the U.S. took part in a voluntary buyout round that closed earlier this month, according to the News Guild of New York. The company hasn't disclosed the number of management employees who applied.

Mr. Thompson said the paper would continue to take steps "to keep our cost base in line."

The Times added 51,000 net digital-only subscriptions in the quarter for a total of 1.212 million online readers, Mr. Thompson said. The publisher also added 16,000 new subscribers to its separate crossword puzzle offering for a total of 212,000.

Overall, the Times reported a loss of $211,000, compared with a year-earlier profit of $16.4 million. On a per-share basis, the company posted break-even results, compared with year-earlier earnings of 10 cents. Excluding restructuring charges related to the streamlining of its international operations and other items, adjusted per-share earnings from continuing operations fell to 11 cents from 13 cents. Revenue decreased 2.7% to $372.6 million.

Analysts polled by Thomson Reuters expected adjusted earnings of 11 cents a share and revenue of $375 million.

Write to Lukas I. Alpert at [e-mail]

(END) Dow Jones Newswires

July 28, 2016 13:05 ET (17:05 GMT)

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