Newspaper publishers New York Times Co. and Tribune Co. reported lower advertising revenues for the second quarter on Wednesday as the industry struggled with deep losses in several categories, especially classified.
The Times, which also owns The Boston Globe, the International Herald Tribune and a group of regional newspapers, posted a 6.9 percent decline in newspaper advertising in the period, while Tribune’s fell 11.2 percent.
Chicago-based Tribune is the nation’s No. 2 newspaper company by circulation and publishes 11 newspapers including the Los Angeles Times, Chicago Tribune and Newsday.
Weak classified advertising was a big factor behind the declines at both companies, falling 13.4 percent at the Times company and 17.7 percent at Tribune.
Classified advertising, long a cash cow for the industry, has been hurt by competition from online alternatives to newspapers and by weakness in the housing market, which affects real estate ads. The Times also noted softness in advertising for banking and other financial services.
Despite the declining revenues, the Times reported that net profits doubled to $118.4 million from $59.6 million a year ago, due mainly to a one-time gain of $94.3 million from the sale of the company’s nine TV stations.
Excluding one-time items, the Times earned 34 cents per share from continuing operations in the quarter, versus 37 cents per share in the same period a year ago. Operating profit excluding depreciation and amortization fell 2.7 percent due to lower revenues, which fell 3.7 percent to $788.9 million.
With revenues continuing to decline, the Times said it would take another $230 million out of its annual cost structure over the next two years. The savings will come from selling an older printing plant in New Jersey, reducing the size of the Times by 1.5 inches beginning next month and other measures.
Tribune, meanwhile, reported that net profits fell 59 percent to $36.3 million from $85.7 million on falling advertising and several significant charges non-operating losses. Earnings per share fell to 18 cents from 28 cents. Excluding the one-time items, operating earnings were 47 cents per share.
Tribune’s revenues fell 7 percent to $1.31 billion.
Reassurances from top Tribune executives that the company’s going-private transaction was fully funded and on track helped send the company’s shares higher Wednesday.
Investors had pushed Tribune stock 20 percent below the agreed-to transaction price of $34 per share on concerns the deal, led by real estate magnate Sam Zell, could be in jeopardy because of the newspaper industry’s worsening travails.