NYTD Pulls Off a Profit

The digital division of The New York Times Company has pulled off its fourth straight quarter with an operating profit, its parent company announced today.

Revenues for NYTD increased 15.9 percent in the second quarter to $17.8 million, from $15.3 million in the 2001 second quarter. The results were part of The New York Times’ overall earnings.

The online and digital media division also managed to eke out an operating profit, which it tallied at $1.9 million in the second quarter. During the same quarter a year ago, NYTD declared an operating loss of $1.1 million in the second quarter of 2001, excluding special items.

Although it didn’t break out further details for the online division, the results did provide at least an inkling that some online advertising categories are on the mend after a brutal two-year downturn.

Company officials said travel, retail, finance and telecommunications proved to be NYTD’s strongest ad categories during the quarter. Also, they said overall classified advertising rose with particular strength in real estate and autos.

But the results were also tempered with the newspaper division’s 2.1 percent decline in ad revenues during the quarter and a 1.4 percent decline when counting all units.

Cost-cutting, layoffs and a one-time sale of The Boston Globe’s magazine group helped offset the relatively flat advertising revenues.

Total revenues inched up by 1.6 percent to $772.2 million compared to last year’s second quarter. Circulation revenues jumped by 12.7 percent and advertising revenues declined 1.4 percent in the second quarter compared with the same period in 2001.

As a result, its overall net income was $78.8 million, or 52 cents per share, compared to $265.4 million, $1.67 per share, during last year, which also reflected a major change in accounting rules and one-time gains from a property sale.

Not counting the new accounting rule-changes, the company said its operating income, on a comparison basis, worked out to $144.7 million during the quarter.

“As a result of slow, but steady improvement in the advertising market and our robust circulation revenue growth, total revenues rose by 1.6 percent compared with last year, with each of our operating groups contributing to the gain,” said Russell T. Lewis, president and CEO.

“NYTD, our digital division, experienced strong advertising revenue growth, which helped it achieve its most profitable quarter ever,” he said.

Company officials said the performance for the balance of the year will depend on the health of the advertising market, which remains flat in its outlook.

“While we continue to see steady sequential improvement in the rate of year-over-year advertising declines, there is no certainty that this will continue.”

As a result, the company dropped its full-year earnings outlook to $1.90 from $2.00 per share, and dropped its third-quarter outlook from the high 30-cent range to 34 cents.

In the company’s bellwether newspaper group, advertising revenues for the month of June were down .9 percent compared to June of last year. The company said national advertising revenue increased as strength in the entertainment, banking, media and hotels categories helped to offset softness in technology products, healthcare/pharmaceutical and financial services advertising.

A weakness in the job market kept classified advertising revenue soft in the newspaper group, much the way sluggish retailing and restaurant sales kept those two categories soft as well.