Published February 07, 2013
The New York Times Co on Thursday reported higher quarterly revenue as more people paid for its digital newspapers, and its shares jumped 11 percent.
Circulation revenue jumped 16.1 percent, mainly because of growth in digital subscriptions.
Paid digital subscribers to the Times and The International Herald Tribune totaled 640,000 at the end of the fourth quarter, an increase of 13 percent from the third period.
Benchmark Co analyst Edward Atorino called the circulation revenue "phenomenal."
"It looks better than I thought," he said about the overall results.
Shares rose 12.1 percent to $9.24 in morning trading.
The company, which also publishes The Boston Globe, is reaping the benefits of charging readers to pay for its digital newspapers, a program it introduced almost two years ago.
Still, there were some troubling signs in the fourth quarter, which included an extra week. Advertising revenue was down 3 percent. Stripping out the additional week, ad revenue tumbled 8.3 percent on a declines in both print and digital.
This quarter is the first under new Chief Executive Mark Thompson, who took the helm in November. He was director general of the BBC, which was rocked by a scandal involving allegations of sex abuse by Jimmy Savile, a popular TV host. Thompson has insisted he was unaware of the accusations.
"For the first time in our history, annual circulation revenues surpassed those from advertising," Thompson said in a statement.
"By contrast, the advertising environment remained challenging in the fourth quarter."
The New York Times is not alone in trying to ease its dependence on advertising and reap more money from readers. Gannett Co , the largest newspaper chain in the United States and publisher of USA Today, reported similar advertising trends on Monday.
Circulation revenue for full-year 2012 represented about 48 percent of total revenue, compared with 45 percent for advertising revenue.
The New York Times said fourth-quarter revenue totaled $575.8 million, a 5.2 percent rise from the same quarter a year ago. Analysts were expecting $570.42 million, according to Thomson Reuters I/B/E/S.
The company reported earnings per share of 76 cents compared with 34 cents in the same period a year ago.
Adjusted for special items including severance costs, the company reported earnings of 32 cents a share, ahead of analysts' expectations of 31 cents.
(Reporting by Jennifer Saba in New York; Editing by Jeffrey Benkoe)