(nytimes.com) The New York Times Company reported on Thursday that its fourth-quarter profit declined 12.2 percent as rising subscription and digital advertising revenue at its largest newspapers could not offset the continued drop-off in print advertising.Net income was $58.9 million, or 39 cents a share, compared with $67.1 million, or 44 cents a share, in the period a year earlier.
For the full year, the company reported a net loss of $39.7 million, or 27 cents a share, compared with a profit of $107.7 million, or 71 cents a share, in 2010.
Revenue for the fourth quarter declined 2.8 percent, to $643 million. For the year, revenue at the Times Company was $2.32 billion, down 2.9 percent. Operating profit fell 4.5 percent, to $106.7 million, for the quarter and dropped 75.8 percent, to $56.7 million, for the year.
The results reflected the continuing struggles of print advertising throughout the industry, as marketers and readers continue to migrate online. Across the company, advertising revenue declined 7.1 percent in the fourth quarter. Print advertising was down 7.8 percent and digital advertising declined 4.9 percent, dragged down by a 25.9 percent revenue drop-off at the company’s About.com property.
The results were brighter at the company’s News Media Group, which includes The New York Times, The Boston Globe and The International Herald Tribune. There, digital advertising was up 5.3 percent and circulation revenue was up 4.7 percent in the fourth quarter, reflecting the growth of online subscriptions at The Times.
Still, every main advertising category spent less at the company’s newspapers in the most recent quarter than they did in the period a year earlier, led by real estate classified advertising, which fell 17.3 percent.
In a continued effort to shed its peripheral assets, the Times Company also said Thursday that it had agreed to sell an additional part of its stake in Fenway Sports Group, owner of the Boston Red Sox, for $30 million, pending the approval of Major League Baseball. Last July the company sold more than half its stake to three separate buyers for $117 million.
The $39.7 million loss for 2011 includes a $161.3 million write-down largely from the company’s smaller regional newspapers in Florida, Alabama and elsewhere. The Times Company announced in December that it had agreed to sell its regional newspapers for $143 million to Halifax Media Holdings, but that sale is not reflected in the 2011 figures.
The results come as the Times Company begins its search for a chief executive to succeed Janet L. Robinson, who left the company after seven years in the post after the issue of a leadership change was raised by the company’s chairman, Arthur Sulzberger Jr. Her departure cost the company $4.5 million in a retirement and consulting agreement, or 2 cents a share. Ms. Robinson’s total exit package could reach five times that amount, according to people familiar with her severance package but unauthorized to discuss it publicly.
Last March, the company introduced its digital pay subscription service at NYTimes.com, viewed by many analysts as a risky but potentially crucial factor in the company’s financial future.
In the six months ended Sept. 30, The Times had the second-largest paid subscription Web site among newspapers behind The Wall Street Journal’s 537,469 subscribers, according to the Audit Bureau of Circulations.
“In 2011 we made significant strides in our strategy to transform and rebalance our company,” Mr. Sulzberger, now the acting chief executive, said in a statement. “Our fourth-quarter results demonstrate the continued focus on building The Times’s digital subscription base.”
The company projected high single-digit circulation revenue growth in the first quarter of 2012 driven by a 4 percent price increase on home delivery of The Times and a 50-cent increase on Monday-to-Saturday newsstand sales.
Mr. Sulzberger said the “economic environment remained challenging” but added that the company would continue to look for “new innovative approaches to expand our reach on new devices, in new markets and through social media.”
In a sign of the economic future newspapers will confront, digital advertising in 2011 accounted for a larger chunk of overall advertising revenue — about 27.7 percent compared with 26.3 percent in 2010.
The company reported that it had $280 million cash on hand at the end of the quarter and a total debt of $773.1 million.This article has been revised to reflect the following correction:
Correction: February 2, 2012Because of an editing error, an earlier version of this article misstated the earnings per share for 2010. It was 71 cents, not 74 cents. The article also misstated the time period for the increase in digital advertising’s share of overall advertising revenue. The figures are annual, not quarterly. A description of the 50-cent price increase for newsstand copies of The New York Times was incorrect, based on information from the Times Company. The price increase was for Monday through Saturday issues, not Monday through Friday. Finally, the company also referred imprecisely to the number of digital subscribers to NYTimes.com at the end of December. The number provided — 390,000 — included digital subscriptions to The International Herald Tribune, which were offered beginning in November. (That figure has been deleted from the article.)
really… it is bad news for the right wing. What it shows is it doesn’t matter if the politburo is profitable.