New York Times takes charge for New England papers
Monday November 10, 11:23 am ET
By Anick Jesdanun, AP Business Writer
New York Times takes $166M charge for Boston Globe, other New England papers
NEW YORK (AP) -- The New York Times Co. has increased its estimates for how much The Boston Globe and other New England newspapers it owns have declined in value because of reductions in advertising.
The Times took a $166 million accounting charge in the third quarter and said any adjustments to that estimate will come in the current quarter. In releasing preliminary third-quarter results last month, the Times estimated the charge at $100 million to $150 million.
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With the change and related tax adjustments, the Times had a net loss of $106 million, or 74 cents a share, in the third quarter, compared with a profit of $13.4 million, or 9 cents a share, in the year-ago period.
The Times had reported preliminary net income of $6.53 million, or 5 cents a share, in this year's July-September quarter before taking the charge, which was detailed in a filing Friday with the Securities and Exchange Commission.
Like all other newspaper publishers, the Times company has been suffering from an ongoing migration of readers to the Internet. Advertising prospects worsened this summer as the weak economy prompted advertisers to cut back spending further.
Although the conditions affect all papers, they affected The Boston Globe and other New England properties the most because they were acquired more recently, giving the company's accounting books less time to absorb deep swings in revenue.
The Times bought the Globe in 1993 for $1.1 billion and the Telegram & Gazette of Worcester, Mass., in 1999 for $295 million. The company also bought a 49 percent stake in the free Metro Boston daily in 2005.
The Times said it had to take an accounting charge because of lowered projections for cash flows, primarily from the loss of print advertising revenue to the Internet. The company also said Metro Boston experienced lower-than-expected growth, with projections continuing to be lower than previously believed.
The Washington Post Co. also took an accounting charge in the third quarter to reflect the declining value of its smaller papers. The charge of $59.7 million covers The Daily Herald of Everett, Wash., and the company's community newspapers division, which includes The Gazette, other weeklies in Maryland and military publications.
Other publishers took similar writedowns in previous quarters.
Shares in the Times company fell 36 cents to $8.96 in morning trading Monday. |
