New York Times Lowers Ad Revenue Outlook

[HenryTo]

Will be interesting to see how the stock does over the next few weeks. And how does this news affect other companies that depend on advertising growth - e.g. the online ad market? Note that the stock fell initially but reversed and rose nearly 5% for the day. However, please also note that the stock has been declining pretty much consistently since June of last year:

http://finance.yahoo.com/q/bc?s=NYT&t=2y
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New York Times Lowers Ad Revenue Outlook
Thursday June 16, 6:44 pm ET
New York Times Lowers 2Q Ad Revenue Outlook, Predicts Earnings Will Come in Below Year-Ago

NEW YORK (AP) -- The New York Times Co. lowered its outlook for second-quarter advertising revenue on Thursday and predicted that earnings would come in below its year-ago results.

The newspaper publisher, which also owns The Boston Globe and the International Herald Tribune, said advertising has improved over a year ago but continues to be "uneven" across categories.

As a result, the company predicted that ad sales will grow by low to mid-single digits, instead of the mid-single digit growth previously forecast.

"While advertising revenues in the second quarter have exhibited modest year-over-year improvement, the ad market remains uneven across categories and markets," chief financial officer Leonard Forman said in a prepared statement.

"So far in June we have not seen a continuation of May's strength, and June ad revenues are currently trending lower than anticipated, although still above the same period last year," Forman said.

Separately, the company also reported that its overall revenues increased 2.4 percent in May versus the same month a year ago, including a 4.6 percent increase in advertising revenues at its flagship newspaper.

After falling initially, the company's shares rose $1.41, or 4.6 percent, to close at $32.15 on the New York Stock Exchange.

The Times predicted earnings of 38 cents to 42 cents for the April-June period, well below the 50 cents per share earned in the second quarter of 2004.

The forecast includes a charge of about $10 million -- equivalent to 4 cents per share and $6.1 million after tax -- from previously announced job cuts, and additional costs of $6 million, or 2 cents per share, for stock-based compensation, which it did not record last year.

Analysts surveyed by Thomson Financial were expecting second-quarter profit of 46 cents, though these estimates usually exclude unusual items such as severance charges and stock compensation.

Looking further ahead, the company noted that it will take an additional severance-related charge in the third quarter and said stock-based compensation expenses will be higher than previously expected for the year. However, the publisher said certain costs -- newsprint, capital expenditures and the tax rate -- will all be below or on the low side of its earlier expectations.