NEW YORK (TheStreet) -- Shares of the New York Times (NYT) - Get Report have lagged those of other newspaper companies since the sector began its steady stock-price climb late this past summer. But a better-than-expected earnings report from the company Thursday allowed Times shares to play catch up.
Investors bid up the stock by as much as 18% Thursday. In afternoon trading, Times shares were changing hands at $10.24, up $1.49, or 17%, on volume of 3.5 million shares, nearly double the daily average turnover in the name.
Market players and media watchers were pretty much looking at one thing: advertising revenue. They want to gauge whether this beleaguered business has touched bottom and whether ad buyers are now prepared to increase in any way their spending on space in newspaper pages.
For sentiment to improve, the smallest clippings of evidence will do. In the case of the Times' third-quarter report, that's exactly what the market got. Total ad revenue, the company said, declined 26.9% from a year ago -- an awful figure. But it's a slower rate of decline than what the Times experienced in the first and second quarters of the year, when ad revenue fell by more than 30%.
, publisher of the
and metropolitan dailies around the country, reported similar declines in ad sales last week. It said that its print advertising revenue dropped 28.4%, which, as with the Times, was a less severe shrinkage than earlier in the year.
Still, when can the world expect something better than 20-plus percent declines in the core businesses of these once-virile organizations?
Some are hoping that retailers -- the biggest spenders on newsprint advertising -- will come up big this holiday season.
The prepared words of Times Chief Executive Janet Robinson, quoted in the company's earning release, indicated further improvement. Still, she was anything but clear on that matter. Indeed, the message seemed quite similar to what the Times was saying in both April and July, when the company reported first- and second-quarter results: we have no real way of knowing what will happen, but it appears as if things are less bad than they were earlier in the year.
The non-paraphrased version ran thusly: "Looking ahead, visibility remains limited for advertising in the fourth quarter," Robinson said the press release. "But as is the case across the media sector, we have seen encouraging signs of improvement in the overall economy and in discussions with our advertisers."
She went on, "Early in the fourth quarter, print advertising trends, in comparison to the third quarter, have improved modestly, while digital advertising trends are improving more significantly."
Overall, the Times said it had adjusted earnings, excluding items, of 16 cents a share in the quarter, well above the consensus Wall Street target, which had the company losing a penny a share.
Including the charges, the Times was in the red, losing $37.5 million, or 25 cents a share. A year ago, the company lost $106 million, or 74 cents a share.
Total revenue, meanwhile, fell 17% from a year ago to $570.6 million. Still, that was above the $562 million that analysts were expecting.
The Times' surprise bottom line resulted from cost-cutting, which has continued apace. Earlier this week, the company said it would lay off 8% of the newsroom staff at its flagship newspaper, which would amount to about 100 jobs. The Times has been praised for its relatively few newsroom job cuts during the recession, widely attributed to an institutional ethic that has sought to preserve the newsgathering and writing prowess of one of the world's premier media organs. The company laid off 100 news staffers in 2008.
-- Written by Scott Eden in New York
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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.