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New York Times Co. Reports a Loss, and a Fall in Digital Ad Revenue New York Times Co. Reports a Loss, and a Fall in Digital Ad Revenue
(about 5 hours later)
The New York Times Company had a slight net loss in the second quarter, in part because of severance costs related to the closing of the company’s editing and prepress operations in Paris. The New York Times Company posted a net loss for the second consecutive quarter, in part because of severance costs related to the closing of the company’s editing and prepress operations in Paris.
The company had strong growth in digital subscriptions, it said on Thursday, but digital advertising revenue, which has been a bright spot in the past, declined.The company had strong growth in digital subscriptions, it said on Thursday, but digital advertising revenue, which has been a bright spot in the past, declined.
In its earnings release, the company said that it had added 51,000 net digital-only subscriptions in the quarter for its news products and 16,000 net crossword product subscriptions. The Times now has about 1.2 million digital-only subscriptions for its news products and 1.4 million total digital-only subscriptions. In its earnings release, the company said that it had added 51,000 net digital-only subscriptions in the quarter for its news products and 16,000 net crossword product subscriptions. The Times now has about 1.2 million digital-only subscriptions for its news products and more than 1.4 million total digital-only subscriptions, an increase of more than 25 percent compared with the same time a year ago.
“We once again saw a robust quarter in terms of digital subscriber growth,” Mark Thompson, the company’s chief executive, said in a statement. During an earnings call with investors, Mark Thompson, the company’s chief executive, struck an optimistic tone. “It was an excellent quarter for audience growth, engagement and our digital subscription business,” he said, adding that The Times drew 126 million unique users in June, and that engagement for nonsubscribers increased 20 percent year-over-year.
The company reported a net loss of about $500,000 for the quarter, compared with net income of $16 million in the second quarter of 2015. The company took a roughly $12 million charge, largely in severance costs, in connection to the Paris closings. Total revenue fell 3 percent, to $373 million, from $383 million in the same quarter a year earlier. In the next quarter, The Times expects to add 55,000 to 60,000 net digital-only subscriptions for its news products and roughly 15,000 net subscriptions to its crossword product.
The Times continued to struggle with declining advertising revenue, which fell about 12 percent, to $131 million. Print advertising revenue slid 14 percent in the quarter, and digital advertising revenue dropped 7 percent, to $45 million. Digital advertising revenue now represents more than a third of the company’s total ad revenue. The company reported a slight net loss of about $500,000 for the quarter, compared with net income of $16 million in the second quarter of 2015. The company took a roughly $12 million charge, largely in severance costs, related to the Paris closings.
“Advertising was tougher in the quarter, particularly on the print side,” Mr. Thompson said. In digital, he added, the company “saw strong growth in mobile, video and virtual reality, branded content and programmatic advertising.” That growth, however, did not offset declines in traditional web display advertising, he said. Total revenue fell 3 percent, to $373 million from $383 million in the same quarter a year earlier, as The Times continued to struggle with declining advertising revenue. Total advertising revenue fell about 12 percent, to $131 million. Print advertising revenue slid 14 percent in the quarter, and digital advertising revenue dropped 7 percent, to $45 million. Digital advertising revenue now accounts for more than a third of the company’s total ad revenue.
“Digital advertising was somewhat lower than we expected for the quarter,” Mr. Thompson said. Increases in mobile, branded content and programmatic advertising, he added, were “not enough to offset declines in web home page and other traditional display advertising.” The company expects total advertising revenue to continue to decrease in the mid-single digits next quarter, though it anticipates double-digit growth in digital advertising.
Circulation revenue increased about 3 percent, to $219 million, as growth from the company’s digital subscription revenue and an increase in home-delivery prices offset a decline in print copies sold. Total daily print circulation declined 6 percent in the quarter, and Sunday circulation fell 4 percent. Circulation revenue from digital-only subscriptions increased 15 percent, to $56 million.Circulation revenue increased about 3 percent, to $219 million, as growth from the company’s digital subscription revenue and an increase in home-delivery prices offset a decline in print copies sold. Total daily print circulation declined 6 percent in the quarter, and Sunday circulation fell 4 percent. Circulation revenue from digital-only subscriptions increased 15 percent, to $56 million.
Adjusted operating profit, the company’s preferred method for assessing performance, decreased to $55 million in the quarter, from $64 million in the year-ago period. Adjusted operating profit, the company’s preferred method of assessing performance, decreased to $55 million in the quarter from $64 million in the year-ago period.
Charges related to the company’s recent buyout offerings were not reflected in this quarter’s earnings. About 80 Times employees took buyouts. Like many newspapers faced with declining print circulation and falling advertising revenue, The Times has looked for new revenue opportunities. It has focused on virtual reality, video and branded content, for example, and pushed aggressively into Facebook Live. The company produced more than 400 Facebook Live videos in the quarter, Mr. Thompson said.
In February, The Times announced a sweeping strategy review of the newsroom that will include reshaping the newsroom for the digital age and identifying areas for cost-cutting. The company also aims to double its total digital revenue to $800 million by 2020. “We’re taking a good, hard strategic look at costs,” Mr. Thompson said. “You can expect to hear more about that on future earnings calls.”
Charges related to the company’s recent buyout offerings were not reflected in this quarter’s earnings. About 80 Times employees took buyouts. The Times expects to take a severance charge next quarter of about $11 million resulting from the buyouts.