The New York Times Company posted a $335,000 loss for the first quarter--a dramatic drop from the $23 million profit the company earned in the year-ago-quarter and missing Wall Street estimates.
Dragged down by a 9.2 percent drop in advertising revenue, the company's revenue slipped to $747.9 million, down from $786 million a year ago. In the company's conference call, they said that these results reflect general economic struggles, as well as a shift in ad spending away from traditional print advertising.
The New York Times is struggling to redefine its business in the midst of a seachange in the advertising business. Its classified ads business is facing steep decline, but luxury advertising is growing, a business the company is playing into by growing its 'T' luxury style magazine. (A quick flip through reveals the big names like Gucci paying up for slick ads).
The company expects the luxury segment to continue to perform well, up in the mid-single digit range.
One big focus on the conference call: emphasizing the company's new focus on, and dedication to, online ads. Boasting that the Times is the tenth most visisted parent company on the web with 48.7 million unique visitors in December.
Now, most of the Times advertisers are buying cross-platform, both online and on the web. Ad prices--both display and cost-per-click--are up, but it's still just the beginning for the company. The company's future hinges on whether it can transition from being a newspaper company to being a next generation content generator, i.e. a media company that distributes in multiple places.
Notably, the company wouldn't comment on the fact that in March the company support the election two board candidates proposed by activist hedge funds Harbinger Capital Partners and Firebran Partners after they threatened to wage a proxy fight. The annual shareholder meeting is on April 22. We'll probably hear more then about the hedge fund pressure on the Times, and how the company is responding.
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