2013-02-08 05:30 AM
The company's stock rose more than 3 percent as the results, released before the market opened, surpassed Wall Street's expectations.
For the first time in the company's history, full-year circulation revenue surpassed advertising revenue. Until the recent economic downturn, newspapers typically got most of their revenue from advertising.
Thursday's results show that the company's strategy of charging for online and mobile access is paying off even as advertising revenue is declining. In March 2011, the company began charging for full access to the Times' website and mobile applications. Some of the company's other newspapers followed.
The Times earned $176.9 million, or $1.14 per share, in the fourth quarter, up from $58.9 million, or 39 cents per share, in the same period a year earlier.
Excluding one-time items, the company earned 32 cents per share, down from 39 cents a year earlier, but above the 30 cents expected by analysts surveyed by FactSet. The Times said the decline resulted primarily from paying taxes at a higher rate in the fourth quarter of 2012. The one-time items included a gain of 66 cents per share on the sale of a stake in Indeed.com, a search engine for jobs. It also had a gain of 40 cents on the sale of The About Group websites to Barry Diller's IAC/InterActiveCorp.
Revenue grew 5 percent to $575.8 million, from $547.4 million. That was above expectations of $571.4 million.
Advertising revenue fell 3 percent to $280 million, from $289 million. A quarter of the ad revenue, or $69 million, came from digital ads.
Circulation revenue increased 16 percent to $257.8 million, from $222.1 million. The company had about 668,000 paid digital subscriptions at the end of the quarter, up 13 percent from 592,000 at the end of the third quarter. The company also benefited from higher prices for print editions at two of its newspapers, The New York Times and The Boston Globe. Home delivery prices for the Times rose 4 percent, for instance, while newsstand prices in New York City rose to $2.50, from $2, for weekday editions. The increases helped offset a decline in the number of print copies sold. The company didn't say how much of the circulation revenue came from digital subscriptions.
"We saw continued strong growth in digital subscriptions as well as increased revenue from our large print circulation base," CEO Mark Thompson said.
Revenue was also boosted by the fact that the fourth quarter of 2012 had an extra week compared with 2011. The quarter began Sept. 24, the day the About sale was completed.
For the full year, the company earned $133.2 million, or 87 cents per share, compared with a loss of $39.7 million, or 26 cents, in 2011. Revenue grew 2 percent to $1.99 billion, from $1.95 billion. The company had $898.1 million in ad revenue and $953 million in circulation revenue in 2012.
The company said it expects advertising revenue trends in the current quarter to be similar to the fourth quarter. But it expects percentage growth in circulation revenue to be in the "mid-single digits" because of digital subscription programs and an additional price increase for the Times' print edition, which took effect during the current quarter.
Shares of the Times Co. rose 27 cents, or 3.3 percent, to close at $8.51. The stock rose as much as 15 percent earlier in the day following the earnings announcement. It is largely unchanged from the start of the year, compared with a 5.5 percent increase for the Standard & Poor's 500 index.