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New York Times Company Reports Increase In Profit, Fall In Revenue

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People pass the New York Times building in New York, Wednesday, Oct. 10, 2012. The New York Times Co.'s stock rose on Thursday, Oct. 11, 2012, after an analyst raised his rating and price target on the shares. (AP Photo/Richard Drew) | AP File
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By Jennifer Saba

Aug 1 (Reuters) - New York Times Co reported on Thursday that second-quarter revenue fell almost 1 percent as gains in subscriptions to its flagship and other newspapers could not offset declines in advertising.

But the company, which publishes its namesake newspaper, the Boston Globe and the Worcester Telegram & Gazette, also posted a better-than-expected profit, and its shares rose 2 percent in morning trading.

Advertising revenue - both print and digital - fell 6 percent from a year earlier to $207.4 million.

The company, as well as the entire newspaper industry, is battling against a relentless decline in advertising - once a primary source of revenue for most newspapers.

To combat the decline, New York Times Co has rolled out a subscription model for its digital products to tap a new revenue stream. Circulation revenue rose 5 percent to $245.1 million in the second quarter, including paid digital subscriptions at its flagship and Boston Globe properties.

Circulation revenue now accounts for half of New York Times Co's total revenue.

Total revenue for the second quarter was $485.4 million, below analysts' average estimate of $487.43 million, according to Thomson Reuters I/B/E/S.

At the New York Times newspaper and its international edition, once known as the International Herald Tribune, digital-only subscriptions increased 35 percent from a year earlier to 699,000.

The drop in advertising revenue in the second quarter was less than first quarter's 11.2 percent. But it is unclear if the decline will continue to moderate. The company forecast that third-quarter advertising trends will be volatile.

"The increase in operating profit reflects the ongoing evolution of our digital subscription initiatives on the circulation side, the moderation of revenue declines on the advertising side, and the continued focus on managing costs," New York Times Co Chief Executive Mark Thompson said in a statement.

Operating profit rose 21 percent to $53.4 million.

Excluding one-time items, it earned 14 cents a share, beating analysts' average estimate by 2 cents.

The company is currently shopping the Boston Globe and its sister Worcester Telegram & Gazette. In its heyday, New York Times Co had TV, radio, magazines, dozens of newspapers and stakes in sports ventures.

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