Earnings: Severance Costs Push NYT To Q3 Loss; Exploring Writedown For New England Media Group

imageThe New York Times Company (NYSE: NYT) is considering a $100-150 million impairment charge for its troubled New England Media Group because times continue to be tough and are getting tougher. That’s the rough translation of “continued softening of business conditions driven by the secular forces affecting the newspaper industry.” CEO Janet Robinson’s explanation in the earnings release (we’ll have more from the call): “The impairment charge reflects the decrease in print advertising revenues stemming from the secular changes in the media industry. … The decline in print advertising revenues this quarter accelerated as the economy slowed.”The impairment testing means today’s Q3 report is only preliminary. The final numbers will be included in SEC filings.

Meanwhile, cost-cutting in the form of severance helped push the company to the red for Q3. The loss of $.01 per share includes $.07 per share in severance; half of the $18.1 million in severance costs are related to the shutdown of the retail and distribution subsidiary. Total revenue dropped to $687 million, down 8.9 percent year over year — primarily due to print decreases. Overall advertising declined 14.4 percent, despite a 10.2 percent increase in online advertising.

More after the jump

Online revenues: Online continues to grow in importance, now accounting for 12.4 percent of the company’s revenues, compared with 10.6 percent in the same quarter last year. For Q3, internet businesses across the company brought in $85.1 million in revenue, up 6.7 percent from $79.7 million in Q307. Online ad revenue makes up most of that, up 10.2 percent to $74.4 million from $67.5 million.

About.com: Revenues for the About Group were up 16.1 percent to $28.7 million; About accounts for roughly one third of all internet revenue. Operating profit increased 71.4 percent to $10.8 million.

Forecast for online cloudy: NYTCo was one of the first canaries in the online-ad coal mine, warning of slowdowns before most wanted to admit it was coming. Robinson warned of slowing digital advertising revenues, mainly because of less display advertising, in Q4 based on current trends, but said visibility is limited.

Joint ventures: The company reported net income of $12.5 million from joint ventures, up from $5.4 million the same quarter last year. The increase is attributed to stronger performance at the various companies.

Earnings | Webcast (11 AM ET) | Transcript

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