New York Times Co posted a higher-than-expected quarterly profit on Wednesday after slashing costs, but the newspaper publisher warned that print advertising will continue to decline in the current quarter.
Ad revenue at the news media group, which includes the Times, Boston Globe and other papers, fell 15 percent in the fourth quarter from a year earlier. New York Times shares fell 6.9 percent in early trading.
U.S. newspapers have been among the media sectors hit hardest by the advertising slump, though the New York Times said advertisers had started to increase their rate of spending across its papers and websites during the quarter.
But Chief Executive Janet Robinson said visibility remains limited for advertising.
In the first quarter of 2010, we expect the rate of decline for print advertising to continue to improve modestly from the fourth quarter, she said in a statement.
Robinson said she expects first-quarter digital ad sales to perform in line with the fourth quarter's.
Fourth-quarter revenue fell 11.5 percent to $681.2 million, compared with the average analyst estimate of $653.2 million, according to Thomson Reuters I/B/E/S.
The New York Times reduced operating costs about 15.5 percent as it cut nearly all major expense categories.
With the decline in print advertising only partially offset by growth in digital advertising, the New York Times has raised prices on its print editions and unveiled plans to charge for content on its websites in 2011.
The company said circulation revenue increased 2 percent as it was able to command higher subscription and newsstand prices at its namesake paper and The Boston Globe.
Online revenue, including About and its newspaper websites, grew 11 percent.
The Times is also working with makers of new devices, like Apple Inc's iPad, on new ways to reach readers.
Fourth-quarter income from continuing operations was 48 cents a share, compared with 19 cents a share in the quarter a year earlier.
Excluding severance costs and special items, profit was 44 cents a share, against the analysts' average forecast of 38 cents a share, according to Thomson Reuters I/B/E/S.
The company, which has been weighed down by debt in recent quarters, said it reduced its year-end debt by over $290 million to $769 million, excluding $67 million in letters of credit. It said there were no outstanding borrowings under the company's $400 million revolving credit facility.
Its shares fell by 81 cents to $10.86 in early trading on the New York Stock Exchange.
(Reporting by Yinka Adegoke, editing by Maureen Bavdek and Gerald E. McCormick)