Memo Pad:. Southern Progress Layoffs... Tough Times...

Time Inc. hasn¿t remained above the fray of magazine publishers slashing costs because of the economy.

TOUGH TIMES: The New York Times Co. on Thursday reported that third-quarter net income dropped 51.4 percent to $6.5 million, while ad revenue slipped 14.4 percent to $398 million, total revenue decreased 8.9 percent to $687 million and executives said during a conference call that the board will “review our dividend policy,” which could result in taking it to zero or cutting it in half.

Following the earnings release, Moody’s Investors Service placed the publishing company’s senior unsecured and Prime-3 commercial paper ratings on review for a possible downgrade. The current ratings, Baa3, is the lowest investment grade rating before dipping into junk status. Meanwhile, Standard & Poor’s lowered its corporate credit rating to junk status, BB-, a three-notch downgrade. “The negative outlook reflects our expectation for significant ongoing rates of EBITDA decline and uncertainty regarding when ad revenue could potentially begin to moderate,” according to the S&P report.

Despite a tough quarter for advertising, a few categories continued to do well, including luxury, which was up in the single digits, financial services, health care and corporate advertising. Internet revenue for the quarter rose 6.7 percent to $85.1 million and Internet ad revenue increased 10.2 percent to $74.4 million.

— Amy Wicks
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