The recession may officially have ended, but the newspaper business (like many industries) does not appear to be enjoying anything resembling a recovery in the third quarter. Wednesday brought news that the New York Times Co. is projecting another round of losses in the third quarter, due to the continuing decline in print newspaper advertising.
NYTCO projects a total revenue decline of 2% to 3%, resulting in a small loss of $0.05-$0.07 per share, due to a 5% drop in print advertising revenue for the quarter.
This is another negative development following somewhat brighter second-quarter results, when growth in online advertising revenues served to offset the print decline.
In the third quarter, NYTCO expects a 14% increase in online revenues. Although it did not release specific figures for some areas, the company said it expects circulation revenues to decline 5% as a result of fewer subscriptions and newsstand sales. Severance costs also had a negative impact on the publisher's bottom line.
NYTCO has yet to implement a much-discussed paywall around some of its online content, which will charge small per-item fees for heavy users after they read a certain number of articles. The new paywall is expected to launch sometime in the beginning of 2011.
There was also some good news for newspapers on Wednesday, with Standard & Poor's decision to raise its outlook for Gannett to "positive" in recognition of its ongoing debt reductions and cost-control measures.
However, S&P did not raise its debt rating from "BB" -- which is below investment grade -- citing continuing threats to the newspaper business and broader economic uncertainty. According to S&P, Gannett paid off $1 billion in debt in 2009 and the first two quarters of 2010, leaving the company with current debts of about $2.6 billion.