New York Times Co. Slashes 2004 Profit Forecast

New York Times Co. (NYT) on Monday forecast third-quarter and full-year earnings below Wall Street's average targets on weak revenue so far in September, sending its shares to two-year lows.

The company joined other publishers, such as Dow Jones & Co. Inc. (DJ) and Knight Ridder Inc. (KRI), that recently have issued profit warnings. While the company posted a 7.8 percent increase in August advertising revenue, it said September "has failed to demonstrate the kind of consistent revenue growth we had been looking for as we reach the fall."

Analysts said the warning was not a surprise given the uneven advertising recovery seen by many publishers. The newspaper industry is trying to claw its way back from a multiyear ad slump triggered by factors including the Sept. 11, 2001, attacks and the war in Iraq (news - web sites).

"I sort of expected the Times would have a tough third quarter," said Edward Atorino, a stock analyst at Fulcrum Global Partners who has a "neutral" rating on the stock. "They, like some other companies, are seeing a soft start to September, which is discouraging."

The publisher of the flagship New York Times (search) and The Boston Globe (search) said September ad sales were slowed by the timing of the Labor Day holiday, generally a period of reduced advertising. It also said investments in editorial operations, election coverage and the impact of recent hurricanes on its southeastern U.S. media outlets are affecting costs.

It said it now expects third-quarter earnings of 30 cents to 33 cents a share, below the Reuters Estimates consensus target of 35 cents a share.

The company sees full-year earnings matching or coming in slightly below year-earlier results of $1.98 a share, compared with Reuters Estimates' average analysts' target of $2.02 a share.

Earlier this month, rival Dow Jones & Co. Inc. cut its quarterly profit forecast because of advertising weakness at its flagship Wall Street Journal, while Knight Ridder Inc. said quarterly earnings would miss estimates due to the impact of the recent hurricanes on its Florida newspapers.

New York Times Co. shares fell 68 cents, or 1.7 percent, to $40.12 on the New York Stock Exchange after earlier falling to $39.95, the lowest level since July 2002.