Time Is Running Short For The New York Times
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Personal Finance 10/28/2014
forbes.com
 The New York Times will announce its third quarter earnings on October 30. It’s make or break time.
On October 1 President and CEO Mark Thompson said 100 plus staff cuts would “safeguard the long-term profitability of The Times,” and were not the result of any short-term business difficulties. The Times seems more confident chopping its way to survival than developing new revenue sources, and sticking by them, until they deliver profitability on a consistent basis.
The Times has not recorded consistent profit growth for five years and can’t realistically expect it again soon. For every bit of good news its executives cling to, there’s worse, sometimes much worse, bad news to go with it. That’s because its balance sheet is in worse shape than executives will admit and its proven ability to embrace change has been limited.
The shares have taken a roller-coaster ride over the last five years. The share price is now closer to its 52-week low (11.22) than its high (17.37). When dividends were reinstated last year the shares got a boost but that artificial high wore off within one twelve-month cycle.
 Source: Yahoo Finance on October 27, 2014
Analysts expect the company to earn $0.00 per share in the 3Q, according to FactSet, and 0.37 for the fiscal year 2014, on a non-GAAP basis.
Circulation and Subscription Revenue Is Up But Can It Last?
The good news is digital subscription numbers were up during the second quarter and the company said in its SEC filing at the time of the staff cuts it had “made progress” on that front again in Q3. If its prediction of more than 40,000 net new digital subscribers for third quarter is realized, it will be the largest number of quarterly additions since 2012.
The bad news is the Times has little patience for what it takes to realize the benefits of its significant digital investments. During the second quarter earnings call, executives said NYT Now, NYT Opinion and Times Premier represented the majority of the subscription revenue growth for that period. Thomson admitted the NYT Now and Opinion apps would have to “market to and reach brand new audiences, stand out on their own and compete in a crowded marketplace,” to be successful. This would “take some time” and the company would have to “build and flex some new marketing muscles, “ to make it happen.
Instead of sticking with them, Thomsen cut the experiments short. NYT Opinion was be mothballed after a trial of only four months. NYT Now will become a smartphone-only product.
Print circulation revenue was slightly higher in the second quarter too, 1.4%, driven by an increase in home-delivery prices that offset lower actual print circulation numbers. Unfortunately, the Times can’t count on raising print subscription rates every quarter or even every year. |
