Thursday, July 23, 2009
A Mixed Bag From the New York Times: Q2 Costs Got Better, Ads Got Worse, and Web Dollars Disappeared
We saw a mini-rally in newspaper shares yesterday, based on the notion that the worst may be over for the industry. But the New York Times’s Q2 results are pretty inconclusive:
The publisher was able to take a big chunk out of costs, but revenue kept plunging, and Web ads dropped by more than 15 percent. The paper did say, though, that things got less bad as the quarter progressed, and that they’ll get slightly less bad next quarter, too.
This is now an Apple earnings-call tradition: Analysts try their hardest to convince Apple executives to express interest in the booming market for cheap netbooks and Apple executives make it perfectly clear how much disdain they have for netbooks. But an $800 iTablet? That’s something else altogether…
More fuel for the “things may not be getting worse, and may even be getting a little bit better” meme that I’ve been detecting (or perhaps promulgating ) recently: Citigroup analyst Mark Mahaney notes that the Internet stocks he covers are up an average of 28 percent so far this year while the tech-heavy NASDAQ is only up seven percent and the broader S&P is down two percent. If this keeps up, we might have an M&A market again. Wouldn’t that be interesting?
Last year, Warner Music Group boasted about its investments in two digital music start-ups. Today the label says those dollars were wasted. Bummer for imeem, which is trying to raise more money.
Charge people who want to read stuff online? Heresy in the media world until recently. Now everyone is noodling with it, and News Corp. is charging hard. Rupert Murdoch says he plans on exporting The Wall Street Journal’s subscription model to other sites soon–but not via Amazon’s Kindle.
For the past year or so, News Corp. CEO Rupert Murdoch has been a consistent voice of pessimism, and he forecast an ugly economy before his big media peers did. And now he’s more upbeat than his fellow media CEOS. Here’s his opening salvo: “It is increasingly clear that the worst is over… there are emerging signs in some of our businesses that the days of precipitous decline are done and that revenues are beginning to look healthier.”
A bad quarter for Disney, but it could have been worse–at least Wall Street was expecting it. After factoring out one-time charges and write-offs, Bob Iger and company earned 43 cents a share on revenues of $8.1 billion. Wall Street had been looking for 40 cents and $8.15 billion, respectively. The bright spot for the entertainment conglomerate is the same one you see at every media giant these days: Disney’s cable business.
Here comes the second round of layoffs at Microsoft, following a first round that started in January. Today’s cuts will likely end up costing about 3,000 workers their jobs. Microsoft had previously warned that it would cut up to 5,000 jobs by 2010. The good news, says CEO Steve Ballmer: The newest round means “we are mostly but not all done” with layoffs. Here’s Ballmer’s memo to the troops.
For the last year or so, the Washington Post Co. has reported steadily declining results for its newspaper business–just like every other newspaper publisher in the country. But in previous quarters, it was at least able to argue that its slide wasn’t as bad as the one the New York Times was going through. It can’t say that anymore.
Things looked a little rough for cable giant Comcast at the end of 2008, but they seemed to have righted themselves again during the first three months of this year: The company outperformed Wall Street’s revenue and earnings expectations and signed up more subscribers than analysts had expected in at least some of its offerings.
