New York : The New York Times Company (NYSE: NYT) has announced 2011 third-quarter diluted earnings per share from continuing operations of $.10 compared with a diluted loss per share from continuing operations of $.03 in the same period of 2010. Excluding severance and the special items discussed below, diluted earnings per share from continuing operations were $.05 in the third quarter of 2011 compared with $.07 in the third quarter of 2010.
The Company had an operating profit of $33.0 million in the third quarter of 2011 compared with an operating profit of $9.0 million in the same period of 2010. Excluding depreciation, amortization, severance and the special items discussed below, operating profit increased 5.5 percent to $65.5 million from $62.0 million in the third quarter of 2010.
"This quarter we continued to execute on our strategy to transform our business, said Janet L. Robinson, president and chief executive officer, The New York Times Company. "We made significant progress in developing a robust digital subscription revenue stream, reduced our operating costs, meaningfully improved our liquidity through the early repayment of high-interest debt and tripled our initial investment on the sale of a portion of our stake in Fenway Sports Group. And despite a challenging advertising environment, our operating profit grew reflecting our strong cost performance and growth in circulation revenues, which rose 3 percent.
"Our digital subscription initiatives remained our top focus in the third quarter. The New York Times continued to build on its paid offerings and The Boston Globe launched the new subscription site BostonGlobe.com to very favorable acclaim in the marketplace. As of the end of the third quarter, The Times had 324,000 paid digital subscribers and paid and sponsored relationships with over 1.2 million digital users. The Times has also seen positive benefits to home-delivery circulation following the launch of its digital subscription plans, with an increase in new orders and improved retention. These results highlight the strength of The Times brand and its ability to further monetize its world-class news, analysis and commentary.
"Although the News Media Group's digital advertising did not see the same strength as in recent quarters largely due to the uncertain economic climate, the Group's digital advertising revenues rose 6 percent in the quarter. NYTimes.com maintained its strong traffic levels and continued to fulfill its premium advertising commitments. And while the About Group continued to face many of the same challenges it saw in the first half of the year, it is making significant progress in implementing a plan to grow its content and traffic and improve its display advertising business.
"Operating costs declined 4 percent despite continued investment in new products, digital technologies and our high-quality journalism. We also made further progress in strengthening our future cash flows with the prepayment of our $250 million 14.053 percent notes in August, three years ahead of maturity.
"At a time of transition, we continue to evaluate our asset portfolio to maintain its alignment with our core operations and strategic initiatives. We continue to market our remaining interest in Fenway Sports Group and are seeing healthy demand."
Unless otherwise noted all comparisons are for the third quarter of 2011 to the third quarter of 2010. This release includes non-GAAP financial measures, a discussion of management's reasons for the presentation of these non-GAAP financial measures and reconciliations to the most comparable GAAP financial measures.
A $65.3 million ($37.8 million after tax or $.24 per share) gain on the sale of 390 of the Company's units in Fenway Sports Group (FSG).
A $46.4 million ($27.5 million after tax or $.18 per share) charge in connection with the prepayment of the Company's $250 million 14.053 percent notes.
A $16.1 million ($10.2 million after tax or $.07 per share) charge for a write-down of assets at The Boston Globe's printing facility in Billerica, Mass., which was consolidated into the Boston, Mass., printing facility in the second quarter of 2009. A $6.3 million ($3.9 million after tax or $.03 per share) charge for an adjustment to estimated pension withdrawal obligations under several multiemployer pension plans at The Boston Globe.
In addition to these special items, the Company had $3.0 million ($1.7 million after tax or $.01 per share) in severance costs in the third quarter of 2011 compared with $0.5 million ($0.3 million after tax or $.00 per share) in the third quarter of 2010.
Total revenues decreased 3.1 percent to $537.2 million from $554.3 million. Advertising revenues decreased 8.8 percent, circulation revenues increased 3.4 percent and other revenues increased 0.8 percent.
Print advertising revenues decreased 10.4 percent. Digital advertising revenues decreased 4.5 percent as higher revenues at the News Media Group were more than offset by declines at the About Group.
Circulation revenues rose as the introduction of digital subscriptions at The Times offset a decline in print copies sold across the News Media Group. Operating costs decreased 3.6 percent to $504.2 million from $522.9 million. Depreciation and amortization decreased to $29.4 million from $30.1 million.
Excluding depreciation, amortization and severance, operating costs decreased 4.2 percent to $471.8 million from $492.3 million mainly due to lower variable compensation costs and professional fees.
Newsprint expense decreased 3.3 percent, with 6.6 percent from lower consumption offset in part by 3.3 percent from higher pricing.
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