Many of us have been waiting quite awhile for sustainable signs that times are really changing for newspaper publishers. However, apparently New York Times (NYSE:NYT) is still having a bit of a struggle putting tough times behind it. Although it beat analysts' expectations, it still reported net profit down 4% today.
The media company's third-quarter diluted earnings came in at $0.33 per share, flat compared to the same quarter last year. Net income was down 4% at $48.3 million. Advertising revenues increased by 3.7%, but circulation revenues were about flat with last year. Total revenues squeaked up by 1.9%.
Increased costs ate into New York Times' profits. These included more expensive newsprint, editorial enhancements, and expansion of The International Herald Tribune. The company also said that as is traditional, it spent more money in covering the presidential campaign. However, enhancements are meant to help draw new readers and advertisers in a long-term investment that hopefully will help boost New York Times for the future.
Although overall ad revenues have been choppy at New York Times, the company's digital group continues to be a bright spot. Advertising revenues increased 32% there. Broadcast media also saw revenues up 9%.
New York Times said in its conference call that it's working on some initiatives to boost revenues for the long term. These include boosting content as well as increasing color capacity, which could be a boon for advertisers. (Speaking of interesting initiatives, I previously wondered what benefits its summer reading initiative would have; the company said in its conference call that the program did have "a positive effect on newsstand sales" in the New York metropolitan market.)
Speaking of colorful newspapers, New York Times shareholders might be a little bit jealous of USA Today's parent company, Gannett (NYSE:GCI), seeing how that company reported another exciting quarter. It's no wonder Gannett is considered a bellwether in the industry.
It's got to be tough for New York Times shareholders when rivals like Gannett and Internet-based media companies like Yahoo! (NASDAQ:YHOO) are reporting robust improvements in their advertising revenues. (Of course, we'll all keep an eye on what headway is made by other rivals, such as Tribune (NYSE:TRB), Washington Post (NYSE:WPO), and Dow Jones (NYSE:DJ).)
While New York Times may be on the right track to gain on competitors, it seems there's still a lot of work to do. With continued signs that it is still struggling with an unstable advertising market, investors may want to think twice before getting with the Times.
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Alyce Lomax does not own shares of any of the companies mentioned. She does all her news reading on the Internet from varied sources, including USA Today and The New York Times.
