New York Times Co. posted third-quarter profit that topped analysts' estimates after the publisher had its biggest increase in digital subscribers in three years.
Ad revenue fell 2.1% in the quarter, dragged down by digital ad sales that dropped 5%, a big swing from a 14% gain in the second quarter. Print ad revenue fell 1%, a big improvement over a 12.8% decline in the second quarter, and circulation sales gained 1.1%, a bit higher than in the most recent quarter.
The company did not immediately explain the diverging fortunes of its ad business, but said digital ad sales will post a year-over-year increase again in the fourth quarter.
"Total revenues grew in the quarter and we maintained a tight rein on costs," New York Times Co. President-CEO Mark Thompson said in a statement. "It was our best advertising quarter of the year, year-over-year, despite a decline in digital advertising revenue, with better performance in print. We remain bullish about our digital advertising business and expect it to return to growth in the fourth quarter."
Earnings excluding some items were 9 cents a share, the company said. That compares with the 6-cent average of estimates compiled by Bloomberg. Revenue rose about 1% from the quarter a year earlier, to $367.4 million. Analysts had projected $364.7 million.
The publisher has been trying to attract more digital subscribers and sell online-marketing messages designed to resemble news stories. Earlier this month, the Times outlined a plan to double its digital revenue to $800 million by 2020 by increasing the number of paid online readers and drawing more young and international subscribers.
The company added 51,000 digital subscribers, its biggest quarterly addition since the fourth quarter of 2012. The Times now has more than 1 million online-only subscribers.
Operating expenses declined 7.6%, partly helped by savings on outside printing costs and distribution.
The Times has joined other publishers in teaming up with Facebook, Google and Apple to load stories more quickly on smartphones.
The Times also continues to invest in print. It introduced a redesigned New York Times Magazine in February and a monthly men's style section in April to bolster print advertising, which still makes up a large part of revenue.
The publisher reported net income of $9.42 million, or 6 cents a share, compared with a loss of $12.5 million, or 8 cents, a year earlier.
-- Bloomberg News