N.Y. Times Co. Profit Down on Falling Value of Boston Globe
Thursday, February 1, 2007
The New York Times Co. lost more than $600 million in the last quarter of 2006, largely because of the diminished value of the Boston Globe, which it owns.
The loss resulted from an $814 million write-down in the value of intangible assets -- such as brand names, reputation and other factors -- of the Globe and the Worcester (Mass.) Telegram & Gazette, according to 2006 year-end earnings reported yesterday.
In addition, the company plans to save up to $75 million in 2007 through cutbacks and outsourcing. "It is very clear the pressure is still on with regard to advertising in New England," Times Co. President Janet L. Robinson told analysts yesterday.
The Times Co. paid $1.1 billion for the Globe and $296 million for the Telegram & Gazette in 2000. Since then, a deteriorating advertising base in New England has hurt the papers and prompted cuts, such as last week's closing of the Globe's remaining foreign bureaus.
Martin Baron, editor of the Globe, said yesterday that he did not expect to cut more jobs this year, and the Times Co. has said the Globe is not for sale. The Times Co. owns 16 other newspapers, About.com and two radio stations. It recently sold its nine television stations.
Excluding the write-down loss, the company beat Wall Street expectations for the fourth quarter. Shares rose 19 cents yesterday, to $23.09
The Times Co. reported a $648 million loss on $931.5 million in revenue in the fourth quarter of 2006, compared with $63.2 million in profit on $893.1 million in revenue in the fourth quarter of 2005. For the year, the company reported a $543.4 million loss on $3.29 billion in revenue, compared with $253.5 million in profit on $3.23 billion in revenue a year earlier.