New York Times' Q2 income rises on cost cuts

The New York Times Co.’s (NYT) second quarter revenue dipped but earnings rose 79% after it cut operating expenses.

Total revenue fell 1.5% to $383 million as weak advertising sales marred gains in circulation, the company said Thursday. Ad sales were down 6% to $149 million. One of the few print media companies that generate more revenue from selling subscription than advertising, the company’s circulation revenue rose 1% to $212 million.

Its net income totaled $16.4 million, up from $9.2 million a year ago after it cut jobs and lowered total operating costs by 5%.

Diluted earnings per share from continuing operations, after adjusting for some items, totaled 13 cents, beating analysts' estimate of 11 cents, according to Zacks Investment Research.

Shares fell 2.3% Thursday to $12.89.

The New York Times, the company's main product, added 33,000 digital subscribers during the quarter after accounting for those who canceled. As of the end of the quarter, it had 990,000 digital-only subscribers who were paying for their stories, podcasts and videos. It has 1.1 million "print-and-digital subscribers," the company said.

"The number of digital subscriber additions in the second quarter was higher than in the same quarter in either 2014 or 2013, despite the impact of our decision to switch NYT Now from a subscription to a free product," said CEO Mark Thompson in a statement.

Facing sinking print advertising sales, the company has cut jobs and other expenses repeatedly in recent months. During the quarter, the company recorded a $9.5 million pension settlement charge after it offered a lump-sum payment to former employees and had severance costs of $1.9 million.

“Cost declines outpaced the decrease in overall revenues," Thompson said. "Expense management will remain a top priority as we head into the second half of 2015, although our emphasis on digital investment and execution is also more intense than ever."

The hike in circulation revenues was driven by a gain in digital subscribers and a price increase for home-delivered papers. Revenue from its digital-only subscription products rose 14% to $47.5 million.

Print advertising sales fell 13%. Digital ad sales, up 14.2% year-over-year, now make up 33% of the company's total advertising revenues.