NY Times Co. 4Q profit triples as ad slump eases

The New York Times Co. posted its highest quarterly profit in 2½ years as the advertising drought eased at the end of 2009 and a steadily shrinking work force saved the newspaper publisher more money.

The publisher of The New York Times, The Boston Globe and 16 other daily newspapers disappointed investors, however, by offering a tepid outlook. Times Co. shares plunged 9 percent Wednesday.

"Visibility remains limited for advertising," said Times Co. CEO Janet Robinson.

Ad sales, the main source of the Times Co.'s income, had fallen between 27 percent and 30 percent during the first three quarters of 2009. In the fourth quarter, the decline was not as steep: 15 percent. And Robinson said a slightly lesser fall is likely in the current quarter.

Other major newspaper publishers, including Gannett Co. and McClatchy Co., already have reported similar ad trends.

Investors nevertheless still seemed to be hoping for a more optimistic forecast, particularly because the comparisons to last year's dismal results will be easier to beat. Times Co. shares shed $1.05 to close at $10.62.

For all of 2009, the Times Co.'s ad sales plunged by 24.5 percent to $1.34 billion. That extended a devastating downturn that has wiped out nearly $820 million, or 38 percent, of the Times Co.'s annual ad revenue since 2006.

The advertising meltdown, driven by a shift toward Internet marketing and the worst recession in 70 years, has prompted the Times Co. to charge its readers more for newsstand copies and delivery of its printed products. But that has not been nearly enough, with circulation revenue rising by less than $5 million annually during the past three years.

With its revenue dwindling, the Times Co. has been eliminating jobs, lowering wages and reducing benefits. In 2009, the Times Co. cut nearly 1,700 jobs, or 18 percent of its work force, to leave it with about 7,700 full-time employees at the end of December. Management told analysts Wednesday that more jobs are likely to be cut this year. But the executives said they couldn't estimate how much the payroll will be reduced until they get a better view of the newspaper ad market.

The streamlining is the main reason that the Times Co. earned $90.9 million, or 61 cents per share, in the most recent quarter. That more than tripled the net income of $27.6 million, or 19 cents per share, a year earlier.

It was the company's highest quarterly profit since it earned $118 million in the second quarter of 2007. In that period, it got a boost from the $575 million sale of nine television stations.

The Times Co.'s latest quarterly profit included gains from the sale of a radio station and a freeze in pension benefits. If not for those unusual items and one-time costs, the Times Co. said it would have earned 44 cents per share. Analysts, who typically exclude such items, expected 38 cents, according to a Thomson Reuters poll.

The Times Co.'s total fourth-quarter revenue fell 11.5 percent to $681 million, better than the $653 million expected by analysts.

Reflecting both the Internet's rising popularity and print's decline, the Web now accounts for 23 percent of the Times Co.'s advertising revenue, up from 18 percent in the prior year. Internet ad revenue climbed 11 percent in the fourth quarter while print ad revenue fell 20 percent.

The company hopes to increase its online revenue next year by introducing a system that will charge the most frequent online readers of The New York Times after they have exceeded a still-to-be-determined quota of free stories. Subscribers to The New York Times print edition will still have unlimited free access to the Web site.

The Times Co. is still trying to sell its 17.8 percent stake in a joint venture that owns the Boston Red Sox, but a deal does not seem near. Robinson told analysts that the sales effort is "complicated."

If it can find a buyer, the Times Co. plans to use the proceeds to lower its debt and lessen the chances that it isn't bringing in enough revenue to repay its loans. Several other newspaper publishers who weren't able to lighten their debt loads have filed for bankruptcy protection in the past 14 months.

The Times Co. ended 2009 with total debt of $769 million, a 27 percent drop from $1.06 billion in 2008. Most of the remaining debt isn't due to be repaid until 2015 or later.

For all of 2009, the Times Co. earned $19.9 million, or 14 cents per share, on revenue of $2.4 billion. That compared with a loss of $57.8 million, or 40 cents per share, on revenue of $2.9 billion in 2008.

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AP Business Writer Andrew Vanacore in New York contributed to this report.