For the past couple of years, there's been a lot of bad news at media conglomerate The New York Times Co.
It might be too soon to declare the end of the scare, but this morning's fourth-quarter report proves the Times is holding up. Earnings per share rose 5.8% to $0.73, while net income ticked upward 3.1%. The company attributed the success to holiday season advertising sales that were better than expected, but circulation revenues, which represent one-fourth of the revenue pie, also were up 7.3% for the quarter.
Remember the big bad Internet and how it was going to strangle newspapers? Well, the Times seems to have mastered the binary threat. Its "digital business" delivered a nice bump in the year's final quarter. Digital revenues increased 27%, to $25 million, and operating income doubled to $7.2 million. This segment is beginning to rival the firm's withering broadcast business, and may eventually surpass it as the Times' second-largest revenue generator behind newspaper operations.
For the full year, the company produced diluted earnings of $1.98 per share, versus $1.94 for 2002. But there were a few one-time items to consider, resulting in a $0.03 gain this year and a $0.03 charge last year, yielding an overall slim 1% drop for 2003 excluding items.
Guidance for 2004 suggests a similarly slim uptick. The Times currently trades at $47 a stub. That's over 23 times next year's projected earnings, far outpacing the Times' expected single-digit growth. Buy the newspaper. Pass on the stock for now.
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Former newsie ragamuffin Seth Jayson can be reached at [email protected] .
