Tuesday, April 21, 2009
The New York Times has just released their Q1 figures and they are a disaster. They like other newspaper chains have given up reporting monthly revenue gains or losses in an attempt to minimize negative exposure. But this is the worst so far. Ad revenues are down 27%, far exceeding the 15 to 20% declines of prior periods. Operating losses are $74.5 million or 23 cents per share, far in excess of consensus estimates of a 4 cent loss. The New York Times (NYSE:NYT) reported a Q1 loss of 23 cents, ex-items, missing consensus estimates for a 4-cent loss. Revenues in the quarter fell 18.5% year-over-year to $609 million, and came in short of consensus estimates of $631 million. The company reported that Q1 ad revenue fell 27%. President and CEO Janet L. Robinson made this statement, "At this time, and it is early in the quarter, we believe the rate of decline in ad revenues in the second quarter will be similar to that of the first. It even has generated speculation the Times will run out of cash and borrowing authority within a year, and possibly have to file for bankruptcy. At the current rate of cash consumption, assuming no one-time expenses (highly unlikely), we estimate that the company will max out its current borrowing capacity in 4 quarters. At that point, it will owe about $1.2 billion in debt. This estimate does not include any payments on the company's $600+ million pension and benefit obligation, of which $181 million is due next year.