Deep cost-cutting, online revenue, help Times Co. stay in black

11 02 2010

But for how long?

The owner of The New York Times reported modest profits from the fourth quarter. But its stock fell 9 percent Wednesday with the announcement. The profits were based mostly on severe cuts, moderate earnings in online operations, and a moderation in advertising losses.

But the market knows that the cuts can’t go much deeper, and the outlook for the Times Co. depends on ad revenue increases this year. For last year, ad revenue in the Times Co.’s News Media Group, which includes the New York Times newspaper, the Boston Globe and the International Herald Tribune, declined 27 percent.

The company also is looking to unload its stake in the Boston Red Sox, which might improve the 1Q bottom line. But like its cuts in news operations, that’s a one-time gain that cannot be sustained.

The much discussed online fees won’t kick in until next year, so look for other drastic measures till then.

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