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New York Times Co. (NYT:US), the third-largest U.S. newspaper publisher, said third-quarter profit fell 52 percent on costs to reduce its workforce.
Net income dropped to $23.1 million, or 16 cents a share, from $48.3 million, or 33 cents, a year earlier, the New York- based company said in a statement today distributed by Business Wire. Sales rose 2.2 percent to $791.1 million from $773.8 million. Profit before one-time items was 21 cents, topping the 17-cent average estimate of analysts surveyed by Thomson Financial.
New York Times, publisher of 18 U.S. newspapers and the International Herald Tribune, cut jobs to counter slowing advertising growth. Higher paper costs, which jumped 8.8 percent in the past year, have cut into profit and the company said it may reduce the page size of the New York Times, which has a daily circulation of about 1.14 million.
``In a tough ad revenue environment, operating performance is suffering'' because of higher spending, said Merrill Lynch & Co. analyst Lauren Rich Fine in a Sept. 30 research note. ``National print ad trends have been weak this year.''
With revenue under pressure, raw material and energy costs have risen. The price of a ton of newsprint, the stock used in newspapers, jumped to $615 by Sept. 30 from $565 a year earlier, according to San Francisco-based research firm ForestWeb Inc. Dow Jones & Co. last week said it will trim the Wall Street Journal's page size in 2007 to cut costs.
The company was estimated to have sales of $787.8 million, according to eight analysts surveyed by Thomson.
Shares of New York Times yesterday fell 23 cents to $27.75 in New York Stock Exchange composite trading. The shares had declined 32 percent this year before today.
The publishing industry is losing advertising to faster- growing forms of media such as the Internet after a 20-year circulation slump. The Times also operates eight television stations and two New York radio stations, as well as more than 40 Web sites.
Knight Ridder Inc., the No. 4 U.S. newspaper publisher, and E.W. Scripps Co. last week posted higher profit as newspaper ad sales held up better than analysts expected. The results reflected similar third-quarter reports from Gannett Co. and Tribune Co., the No. 1 and No. 2 U.S. newspaper companies, respectively.
Dow Jones reports results tomorrow.
The New York Times publishes the Sarasota Herald-Tribune in Sarasota, Florida, and the Boston Globe and Worcester Telegram & Gazette in Massachusetts.
National advertising, the company's biggest ad category, has been hurt by marketing cutbacks from Hollywood movie studios and other customers, said Merrill Lynch's Fine in the research note.
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