NYT Can't Cut Costs Fast Enough For Plunging Revenues

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The New York Times Company (NYT) today posted a Q2 earnings per share of $0.08, better than the $0.04 loss Wall Street expected.

But revenues dropped 21% to $585 million, below an expected $603 million.

And, after plunging 28% in the first quarter, ad revenues declined 31.9% during Q2. Internet revenues sank 14.3%; Internet ad revenues, 15.5%.

The Times’s operating profit reached $23.3 million during Q2, down from $100 million during the same quarter a year ago, but up from a $74.5 million loss in Q1.

A search for good news ends with Times president and CEO Janet Robinson saying how well the company cut costs this quarter and that ad revenues should return in the Fall:

“We again demonstrated our commitment to restructuring our operating costs, which fell 20 per cent in the quarter. In the first half of the year, we lowered our operating costs by about $210 million. With our many initiatives to operate more efficiently and effectively across the Company, we are on course to achieve approximately $450 million in savings this year, which amounts to 16 per cent of our 2008 cost base.

“During the first half of the year, we reduced the level of our debt by approximately $45 million from our 2008 year-end balance. We plan to continue to lower the amount of outstanding debt with cash flow from operations and proceeds from divestitures, including the recently announced agreement to sell our New York City radio station, WQXR-FM, and the potential sale of our interest in New England Sports Ventures, which includes the Boston Red Sox and New England Sports Network, a highly rated regional cable channel.

“Based on what we have seen so far in July, we expect the advertising environment to continue to be challenging. We believe the rate of decline will moderate slightly in the third quarter from what we experienced in the second quarter.

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