• by March 6, 2001

(AP) - The New York Times Co. warned investors Monday that its first-quarter earnings would fall well below analysts' expectations as an economic slowdown exerts a drag on advertising revenues.

But the company said it still expected to meet its target of 10% to 15% growth in full-year earnings per share, thanks to tighter controls on costs and added revenues from circulation because of two recently announced price increases.

The New York Times said it now expects earnings per share of 35 cents to 38 cents in the first quarter, compared to 47 cents per share in the same period a year ago. Analysts surveyed by First Call/Thomson Financial had expected 45 cents per share.

Investors responded by sending the company's shares down $2.50, or 5.5%, to $43 on the New York Stock Exchange.

The New York Times said it expected advertising revenues for its newspapers to rise 1% to 3% for the entire year, with much of the growth coming in the second half of the year. The company had previously forecast growth of 5% to 7%.

However, the company said it expected additional operating income of $30 million to $32 million in the year from two recent price increases, one for home delivery of The New York Times and another for the newsstand price of Sunday editions. The company also increased home delivery prices for The Boston Globe late last year.

Like other newspaper publishers, The New York Times is facing difficult comparisons for advertising revenues in the first half of this year versus the same period a year ago, when Internet companies were still spending heavily on advertising as the stock market and the economy boomed.

Advertising revenues have already been slowing in recent months, and the trend is expected to continue. The New York Times said its advertising revenues grew 15% and 14% in the first two quarters of 2000 respectively, but only 6% and 2% in the third and fourth quarters.

The company also said it expected lower growth in costs this year because of decreasing newsprint consumption, lower expenses at its online division and other cost-cutting measures. The company now expects costs in its newspaper group, excluding newsprint and buyouts, to grow between 0% and 2%, compared to a previous forecast of 3% to 5%.