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New York Times Posts Loss, Writes Down Value of Boston Globe
By Leon Lazaroff
Jan. 31 (Bloomberg) -- New York Times Co., the third-largest U.S. newspaper publisher, posted a loss of $648 million after writing down the value of its Boston Globe unit. The company also said it will restate results.
The net loss was $4.50 a share, from $63.2 million, or 44 cents, a year earlier, the New York-based publisher said today in a statement. Revenue rose 4.3 percent to $931.5 million, compared with the average analyst estimate of $899 million in a Bloomberg survey.
New York Times, also publisher of its namesake newspaper, struggled to boost circulation and advertising at the New England Media Group, which includes the Boston Globe, Boston.com and the Worchester Telegram & Gazette. The company wrote down the value of the assets, bought 13 years ago for $1.1 billion, by $814.4 million.
``The Boston economy is still tough,'' said Steven Barlow, an analyst at Prudential Equity Group in New York who has an ``underweight'' rating on the stock.
New York Times shares fell 15 cents to $22.90 in New York Stock Exchange composite trading yesterday. They had declined 18 percent in the past year before today.
Profit excluding the charge was 61 cents a share, beating the 47-cent average estimate of 13 analysts.
New York Times is cutting costs to prop up profit as advertising revenue cools. Earlier this month, the company sold its nine U.S. television stations to Oak Hill Capital Partners for $575 million in order to pay down debt and expand its Internet businesses.
Circulation Drops
Weekday circulation at the Boston Globe fell 6.7 percent to 386,415 in the six months ended Sept. 30, according to the most recent figures from the Audit Bureau of Circulations. Advertising revenue at New England Media Group fell 12 percent to $97.4 million in the third quarter.
New York Times said in November that it might reduce the value of the assets, sparking speculation the company may be willing to sell the New England unit. Former General Electric Co. Chairman Jack Welch said in November that he is interested in buying the Boston Globe.
A week ago, the Globe said it will close its last overseas news bureau to save more than $1 million a year. The closings came as the newspaper said it would eliminate 125 jobs at its New England group.
Both the Massachusetts newspapers are struggling to compensate for advertising lost when Filene's and Macy's, two major local retailers, were combined by Federated Department Stores Inc.
To contact the reporter on this story: Leon Lazaroff in New York at
[email protected] .
Last Updated: January 31, 2007 08:48 EST