While the New York Times Co. (NYSE: NYT) had fairly small revenue growth and net income declined by double digits, it was still better than what Wall Street had been anticipating. On the digital side, things are looking much better these days, as online revenues rose 21 percent.
In comparison, print revenues continued to fall 6 percent, though the pace of declines has slowed, which is similar to what other newspaper companies experienced in Q2.
The company did boast operating profit more than doubled to $60.8 million, reduced its debt by one-third $670 million. Circulation, which has become a more important revenue stream in the face of print ad declines, was up a modest 3.2 percent, mostly due to higher newsstand prices. Operating costs were reduced by 4.3 percent to $528.8 million.
The Reuters analysts consensus had adjusted EPS at $0.13, while the NYTCo came through at $0.18, which did not include the $0.03 per share gain from the partial sale of its New England Sports Ventures, which includes the Boston Red Sox and approximately 80 percent of New England Sports Network, in April.
As for highlights from the particular business segments:
— News Media Group: Revenues were only slightly better than flat at $555.9 million. While digital revenues at the NYTCo in total were up 21 percent, in this segment, which includes the NYT newspaper and its website, along with the International Herald Tribune, and Baseline StudioSystem, online grew 19.8 percent partially offsetting the print decline of 6.1 percent. Operating profit in the segment leapt 159 percent to $54.4 million from $21 million in Q209.
— About Group: After experiencing some rough times last year, this segment is back to being a principal driver of online growth for the NYTCo. The group includes the About.com guide site — which just launched a new ad campaign this week aimed at advertisers — as well as service sites Caloriecount.com, UCompareHealthCare.com and ConsumerSearch.com. Collectively, revenues for the group gained 24.1 percent to $33.7 million in Q2 and operating profit rose 50 percent to $15.3 million. One spot that could be trouble if advertising falls off again is costs, as the About Group’s expenses were 8.4 percent higher than Q209.
— Internet revenues: Taking a closer look at the money coming in from NYTimes.com, About.com, Boston.com and other company websites, total Internet revenues increased 20.5 percent to $94.3 million from $78.2 million. Internet ad dollars represented $82.4 million of that, for a rise of 21.2 percent over Q209’s $68 million.
For the first half of 2010, online revenues jumped 18 percent to $184.6 million, while ad revenues in particular were up 19.8 percent to $162.4 million. Overall, the NYTCo’s internet businesses accounted for 15.7 percent of its total revenues during the first six months, a little bit higher than the 13.1 percent for first half of ’09. In other words, despite all the improvements and clear focus on deriving more revenues from its web properties — including the metered paywall system expected to come in little more than six months from now — the declining print business will continue to carry the load for some time to come.

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