The New York Times Co. will update investors on its newspapers' efforts to retain readers and advertisers when it reports its third-quarter results before the stock market opens Thursday.
WHAT TO WATCH FOR: The newspaper's advertising slump is deepening again, a disheartening sign for industry executives and investors who entered this year believing the worst was over.
The New York Times Co. expects its ad revenue for July-September period to be down by about 8 percent from the same time last year. That compares to year-over-year declines of 4 percent in each of this year's first two quarters.
The company, which owns The New York Times, The Boston Globe and 16 other daily newspapers, softened the third-quarter blow to its advertising business by bringing in more money from subscribers. Times Co. CEO Janet Robinson predicted circulation revenue would be up by about 4 percent last year.
The situation also got bleaker during the third quarter at Gannett Co., the owner of USA Today and more than 80 other daily newspapers. Gannett reported its publishing ad revenue dropped 8.5 percent, the steepest decline since the final quarter of 2009.
In a sign that Times Co. management is bracing for the tough times, its namesake newspaper last week disclosed plans to eliminate 20 newsroom jobs through employee buyouts. It will be the first significant staff reduction at The New York Times, the third largest U.S. newspaper, since the end of 2009, when about 100 of the newsroom's 1,250 jobs were cut.
Major newspapers throughout U.S. have been struggling for the past five years as their main source of revenue — print advertising — has shifted to less expensive alternatives on the Internet. Some digital advertising has been going to newspaper websites, but it hasn't been nearly enough to offset the erosion in print.
The New York Times is trying to supplement its digital advertising push by charging readers for unrestricted access to its content on the Web, Apple Inc.'s iPad and mobile phones. After introducing the digital fees in March, the Times had 224,000 subscribers as of June 26.
WHY IT MATTERS: If the Times Co. can't increase its revenue, it might have to cut even more staff. Further reductions could hurt the quality of the company's newspapers.
WHAT'S EXPECTED: Analysts polled by FactSet expect earnings of 3 cents per share on revenue of $543 million.
LAST YEAR'S QUARTER: The Times Co. lost $4.3 million, or 3 cents per share, on revenue of $554 million at the same time last year. The results were dragged down by accounting charges for an old printing plant in Massachusetts and changes to employee pension plans at The Boston Globe.