New York Times profit falls as ad sales drop

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New York Times Co., the third- largest US newspaper publisher, saidsecond-quarter profit declined 5.5% as job cuts and price increasesfailed to make up for plunging print advertising sales.

Chief executive Janet Robinson said the company is acceleratingcost-cutting efforts in the face of a slumping US economy and willexceed a target for $US230 million in annual savings by the end of2009. Robinson also said the New York Times newspaper will raiseits weekday newsstand price by 25 cents to $US1.50 starting August18.

June ad sales tumbled 16%, the most in at least two years,mirroring the slide reported last week by Gannett Co., the largestUS newspaper company. The publishers were hit by a steeper drop innational ads, coupled with a continued decline in classifieds asmarketers moved to the internet.

''I doubt whether you'll see any improvement at all this year,''said John Morton, a newspaper industry analyst. The drop in June is''about in line with what other companies are reporting.''

Income from continuing operations fell to $US20.9 million, or 15cents a share, New York Times said in a statement. Excluding coststo cut jobs, profit of 26 cents beat the 22-cent average of sevenanalysts' estimates compiled by Bloomberg. Sales dropped 6% to$US741.9 million, trailing estimates.

Excluding New York Times' broadcast business, which it sold in May2007, the company's profit was $US22.1 million, or 15 cents ashare, in the year-earlier quarter.

Ad Sales

New York Times, also the owner of the Boston Globe and About.com,rose 34 cents, or 2.6%, to $US13.20 in New York Stock Exchangecomposite trading. The shares have declined 25% this year.

July ad sales may be worse than June, Robinson said on a conferencecall.

''It's clear that many of the advertising budgets are tighteningup, not to say that they're totally going away,'' she said. ''Weare continuing to focus very much on the cost side of ourbusiness.''

Revenue at the News Media Group, including the New York Times,Boston Globe and their websites, fell 6.7% to $US713.3 million inthe second quarter, dragged down by a 12% drop in ad sales. Priceincreases at the flagship newspaper boosted the division'scirculation revenue.

Higher Prices

The New York Times newsstand price increase announced today followsa 25-cent increase a year ago and an average 4.5% rise in homedelivery charges in the last year. In September, the newspaperstopped charging readers for access to columnists and archivesthrough the TimesSelect service on its website.