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New York Times revenue forecast below Street view


A window washer cleans the windows above the front door of the New York Times building in New York in this March 26, 2010 file photo. REUTERS/Gary Hershorn
A window washer cleans the windows above the front door of the New York Times building in New York in this March 26, 2010 file photo. REUTERS/Gary Hershorn

NEW YORK (Reuters) - New York Times Co <NYT.N> forecast a third-quarter revenue decline that is worse than Wall Street was expecting because of advertising and circulation revenue declines, dashing hopes of a rapid recovery at the U.S. newspaper publisher.

Shares fell as much as 5 percent in morning trade on Wednesday.

The newspaper publisher expects revenue to fall 2 percent to 3 percent in the third quarter. Analysts were expecting a 1.2 percent drop, on average, to $563.82 million, according to Thomson Reuters I/B/E/S.

No sharp rebound in advertising is expected this year, New York Times Chief Executive Janet Robinson said at the Goldman Sachs Communacopia conference in New York.

"I don't think anyone thought there would be a hockey stick return for advertising," she said.

New York Times Co expects to report an operating loss in the range of 5 cents to 7 cents per share in the third quarter.

Excluding items, the newspaper publisher expects a third-quarter profit of 3 cents to 5 cents a share.

The "sequential improvement in newspaper ad declines is slowing," UBS analyst John Janedis wrote in a note to clients. UBS initiated coverage of the Times on Tuesday with a sell rating.

Robinson said the company "is going to see a very slight improvement" in print ads in the third quarter. The Times expects print advertising to fall 5 percent in the third quarter, compared with a 6 percent decline in the second quarter.

The newspaper publisher expects digital ad revenue to increase by 14 percent in the third quarter, down from a 21 percent increase in the second quarter.

Robinson said the New York Times has not seen any impact from The Wall Street Journal's New York edition, which its owner News Corp <NWSA.O> began printing to take readers and advertisers away from the Times.

The company expects fourth-quarter operating costs to be flat, even with higher newsprint prices this year.

"I think we're seeing positive momentum," Robinson said, adding that the company would keep trimming production and manufacturing costs .

The Times expects to announce more details on a plan to charge readers for online access. It plans to start charging next year.

The Times owns its namesake newspaper, the International Herald Tribune, The Boston Globe, other daily U.S. newspapers.

New York Times shares were trading 4.4 percent lower at $7.62 on the New York Stock Exchange on Wednesday.

(Reporting by Jennifer Saba and Liana B. Baker. Editing by Derek Caney and Robert MacMillan)

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