New York Times Co. (NYT:US)’s advertising declines abated in the fourth quarter, helping the publisher beat earnings estimates even as subscriber growth slowed.
Ad sales fell 1.3 percent from a year earlier, leaving out an extra week in 2013 for comparison purposes. It was the 13th straight quarterly drop in advertising, including a 2 percent slowdown in the third quarter.
Times Co. has become more reliant on readers than on advertisers for annual revenue, and Chief Executive Officer Mark Thompson is working to lure more subscribers by creating packages of news coverage at different prices, including a limited plan that will cost less than its current offering.
Digital subscriptions climbed 19 percent to 760,000, decelerating from the prior quarter’s 28 percent gain, the Times said today in a statement.
Times Co. shares gained 3.3 percent to $14.30 at the close in New York. The stock has surged 74 percent in the past year.
Leaving out any adjustments, the Times’ ad business fell 6.3 percent to $212 million. Profit, excluding one-time items, was 26 cents a share, compared with the average analyst estimate of 16 cents (NYT:US), according to data compiled by Bloomberg. While circulation sales fell 3.9 percent to $208 million, they gained 2.7 percent leaving out the extra week last year.
For the first quarter of this year, the publisher forecast (NYT:US) a growth rate in the “low single digits” for circulation sales. Advertising revenue will have a similar decline to the fourth quarter’s adjusted 1.3 percent drop, the company said.
Thompson is trying to reverse advertising declines by revamping the sales staff. He hired a new top sales executive, Meredith Kopit Levien, who is spearheading a native-advertising program, which lets marketers craft messages made to resemble the newspaper’s articles.
Total fourth-quarter sales dropped 5.2 percent from a year earlier to $444 million. Analysts forecast $441 million on average.
The company’s dividend, reinstated in December after a five-year pause, costs the publisher about $24 million on an annual basis. The Ochs-Sulzberger family, which controls the publisher, stands to make as much as $3.1 million a year from the payouts, far smaller than the $20 million it got as recently as 2008.
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