But analysts said the results were still positive because the company closed the chapter on selling off its portfolio of tangential assets and shifted its focus to its more profitable core product, journalism by The New York Times, its website and the International New York Times, formerly known as The International Herald Tribune.
The Times agreed in early August to sell the New England Media group for $70 million to John W. Henry, the owner of the Boston Red Sox, and completed the deal last week.
“It’s the first time we’re analyzing the company on a pure play basis in a sense without the New England Media Group,” said Alexia S. Quadrani, an analyst at JPMorgan Chase. “It’s a different experience. The results were relatively good. The advertising decline was the most modest decline we’ve seen in about three years.”
The Times Company reported loss of $24 million in the third quarter, which included an $18.9 million loss from discontinued operations related to New England Media Group and a $2.5 million income tax expense from the sale. The Times also paid out a $6.1 million pension withdrawal expense. The company posted a $2.7 million gain in the same period a year ago. The third-quarter loss is equal to about 16 cents a share, compared with a gain of 2 cents in 2012.
The company reported a $5 million loss in income from continuing operations, compared with a $2.9 million loss the year before.
Total revenue for the third quarter rose by 1.8 percent, to $361.7 million from $355 million the year before. Over all, the company’s total advertising revenue declined by 2 percent, to $138 million from $140.9 million, the lowest year-on-year quarterly decline in the category in three years. Print advertising revenue declined by 1.6 percent. Digital advertising revenue shrank by 3.4 percent, to $32.8 million from $33.9 million, and also declined as a percentage of overall revenue, to 23.8 percent compared with 24.1 percent in 2012.
Circulation was a bright spot for The Times, with revenue growing 4.8 percent. The number of paid subscribers to the company’s digital-only packages, which include the website, e-reader and other digital editions, was 727,000, a jump of more than 28 percent from the same time the year before, when it was 566,000.
Operating profit, that from normal operations that does not include things like interest or tax expenses, was $12.8 million, a rise of 44 percent from $8.9 million a year ago.
The Alliance for Audited Media also released its data on Thursday showing that The Times’s combined print and digital circulation grew by 14 percent on Sundays to 2,391,986 and by 18 percent on Monday through Fridays to 1,897,890.
Mark Thompson, the Times Company’s chief executive, said in a news release that the company’s progress was encouraging. “We increased our revenue, decreased our costs and, as a result, significantly increased our operating profits compared with the same quarter last year,” he said.
The Times Company has been undergoing a major transformation in recent years. In addition to the New England Media Group sale, it completed sales of 16 regional newspapers, the About Group and its stake in the Fenway Sports Group. The company also has focused on its global expansion. In October, it changed the name of The International Herald Tribune to The International New York Times and continued its plan to expand its international footprint.
“We also made significant progress on our strategic initiatives,” Mr. Thompson said in a statement about the company’s expansion plans. “But we recognize that, despite these positive developments, we still have a great deal of work to do to transform our business model and to achieve our goal of long-term sustainable growth.”
Executives say they expect spending to grow as the company continues its expansion. Craig Huber, an independent research analyst with Huber Research Partners, said he would watch closely for the payoff.
“It will be very interesting to see if they get a proper return from all this internal investment,” said Mr. Huber.
Article source: http://www.nytimes.com/2013/11/01/business/media/times-co-reports-quarterly-loss-after-sale-of-globe.html?partner=rss&emc=rss
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