New York Times Co. (NYT:US), the newspaper publisher controlled by the Ochs-Sulzberger family, reported a lower-than-projected third-quarter loss after print advertising improved, even as online ad sales slumped.
The Times’ advertising business slid 2 percent from a year earlier to $138 million, slowing from the second quarter’s 4.7 percent decline. Even so, online ads fell twice as fast as those in the physical newspaper. The loss, excluding one-time items, was 1 cent a share, compared with the 3-cents-a-share loss analysts forecast (NYT:US), according to data compiled by Bloomberg.
The publisher now relies more on readers than advertisers for its revenue, and Chief Executive Officer Mark Thompson is working to meet new demand by creating tiered packages of content at different prices. That includes a possible lower-priced plan. Third-quarter circulation sales gained 4.8 percent to $204 million, helped by a 28 percent increase in digital subscribers to 727,000.
Thompson is also revamping an ad sales department that has contended with executive turnover and cost reductions, making it more difficult to compete. He picked a new head sales executive, Meredith Kopit Levien, in July to help lead the company back to advertising growth.
The company’s shares rose less than 1 percent to $13.83 at the close in New York. The stock has surged 62 percent this year, compared with a 23 percent gain in the Standard & Poor’s 500 Index.
The dependence on online-reader growth will continue in the fourth quarter, the Times said. Circulation sales will increase by a low-single-digit percentage from a year earlier, while advertising revenue will have a decrease in the low single digits.
While online readers rose, digital advertising dropped 3.4 percent to $32.8 million, “due to ongoing secular trends and an increasingly complex and fragmented digital advertising marketplace,” the Times said. Print ads fell only 1.6 percent.
Total revenue gained 1.8 percent to $361.7 million. Digital circulation revenue gained 29 percent to $37.7 million. This is the first time the publisher has shown circulation revenue by media.
The company this month reinstated its dividend payments to investors, who will receive 4 cents a share, costing the company about $24 million on an annual basis should the publisher continue payments every quarter. The Ochs-Sulzberger family stands to make as much as $3.1 million each year, far smaller than the $20 million it got as recently as 2008.
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