The New York Times Co. reported a sharp decline in its third-quarter net income on Thursday and said revenue fell below analysts' expectations amid weakness in print and digital advertising.
The company's stock fell 21 percent in afternoon trading.
The media company, which publishes its namesake newspaper and the Boston Globe, earned $2.3 million, or 2 cents per share, in the July-September period. That's down 85 percent from $15.7 million, or 10 cents per share, in the same period a year earlier.
In the year-ago quarter, the Times Co. booked a one-time gain of $37.8 million, or 24 cents per share, from the sale of its stake in the Red Sox and other sports holdings. This was partially offset by a charge of $27.5 million, or 18 cents per share, from its early repayment of a $250 million high-interest loan from Mexican telecommunications billionaire Carlos Slim.
The company booked severance costs totaling $1.7 million, or a penny per share, in both quarters.
Excluding the severance expenses and the results of businesses it no longer owns, the Times Co. booked a loss of 1 cent per share in the latest quarter, the same as in the third quarter a year ago. Analysts were expecting third-quarter adjusted earnings of 8 cents per share.
Revenue fell less than 1 percent to $449 million from $451 million. Analysts, on average, were expecting revenue of $477 million, according to a poll by FactSet.
Advertising revenue fell 9 percent in the third quarter to $182.6 million from $200.5 million a year earlier. Circulation revenue rose 7 percent to $234.9 million from $218.6 million.
"While our results for the third quarter reflect continued pressure on advertising revenues, total circulation revenues rose led by the ongoing expansion of our digital subscription base," said Arthur Sulzberger, Jr., chairman and CEO, in a statement.
The company said it expects fourth-quarter advertising trends to be similar to the third quarter.
The Times Co. ended the quarter with 592,000 paying digital subscribers, up 11 percent from 532,000 at the end of the second quarter.
In March of 2011, the company erected a so-called electronic pay wall system, which charges readers for monthly access to an unlimited number of articles on its website and on mobile devices. The strategy, closely watched by executives in the industry, has helped to boost the Times' circulation and is being adopted at many other newspapers.
The company's stock fell $2.19, or 21 percent, to $8.46 in afternoon trading. The stock has traded in the 52-week range of $5.88 and $11.07.
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