Apparently, you can teach old-economy stocks some new-economy tricks. Last night, New York Times (NYSE:NYT) updated its guidance, announcing that its About.com division will be accretive to earnings earlier than expected.
A little more than a year ago, the print-media giant announced that it would acquire About.com from magazine whiz Primedia (NYSE:PRM) in a $410 million transaction. At the time, the company figured that About.com wouldn't enhance its bottom line until 2007. Now the publisher is expecting the content-rich online directory to help out its profitability here in 2006.
Despite owning old-media juggernauts like The New York Times and The Boston Globe, NYT has embraced the Internet revolution. Its NYTimes.com site has been a hotbed of traffic, and it launched a premium online service last year to cash in on its popularity and its roster of noted columnists.
About.com runs at a different speed, with dedicated "guides" watching over many different areas. It's a reference portal with a human bent, and if your latest online research spree didn't land you on Wikipedia, there's a good chance you wandered through one of About.com's dedicated areas.
NYT now expects to earn between $0.41 and $0.43 a share for the second quarter. That's flat with last year's $0.42-per-share showing, even though both periods were weighed down for staff-reduction charges.
The Internet will be a big factor for many chains. Locals trust their namesake newspaper sites, and companies like NYT and Washington Post (NYSE:WPO) have been gobbling up popular online destinations. Global publishing and media heavy News Corp. (NYSE:NWS) even owns the Web's flavor of the week, MySpace.com.
So well done, NYT. It was about time.
Longtime Fool contributor Rick Munarriz still enjoys reading the paper in the morning, but finds it obsolete once breakfast has been consumed. He does not own shares in any of the companies mentioned in this story. T he Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
