Updated from 8:26 a.m. EDT
A poor help-wanted advertising market, SARS-related travel weakness and the Iraq war will cause the
New York Times'
second-quarter earnings to fall short of estimates.
The company expects to earn 43 cents to 47 cents a share in the quarter and said the balance of the year will depend on the strength of the recovery in the economy and the advertising market. It currently expects 2003 earnings per share to increase in the low- to mid-single digits.
Analysts polled by First Call currently expect the company to earn 54 cents a share in the second quarter and $2.15 a share for the year, roughly a 9% increase over the $1.97 a share it earned in 2002.
"Our advertising results in May, as well as results thus far in June, reflect a modest improvement from the year-over-year declines we experienced during March and April, which were caused primarily by the war in Iraq," the company said. "Other factors that are constraining our second-quarter advertising growth include softer sales in the hotel and transportation/travel category related to SARS and geopolitical instability, a weak retail category, and the difficult job market, which continues to negatively affect recruitment advertising."
The company also said it's paying more for newsprint and labor.
reaffirmed that its expected second-quarter earnings per share will be in the "low to mid" 90-cent range and largely in line with analysts' consensus estimate.
The company earned 90 cents a share in last year's second quarter. Analysts expect 93 cents a share in the current quarter.
The publishing company also said that June retail advertising revenue is showing a stronger performance than May, according to early indications. "Our first week 'Flash Report' indicates that we will be in positive territory," the company said, but it cautioned that what is true for the first week's results may not hold for the whole month.
Shares of San Jose-based Knight Ridder were slipping about 1.5% in morning trading to $68.23.