The New York Times Co. reported a lower-than-projected third-quarter loss as circulation revenue continued to grow but online advertising slumped.
Ad business at the Times, which is controlled by the Ochs-Sulzberger family, slid 2% from a year earlier to $138 million. That's a smaller drop than the second quarter's 4.7% decline. Even so, online ads fell twice as fast as those in the physical newspaper.
Digital advertising dropped 3.4% 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%.
The company's loss, excluding one-time items, was 1 cent a share, compared with the 3-cents-a-share loss analysts forecast, according to data compiled by Bloomberg.
The publisher now relies more on readers than advertisers for its revenue, and CEO Mark Thompson is working to continue circulation growth by creating tiered packages of content at different prices. That includes a possible lower-priced plan. Third-quarter circulation revenue gained 4.8% to $204 million, helped by a 28% increase in digital subscribers to 727,000.
Mr. 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. She recently told Ad Age that the Times is planning to introduce branded content units into its redesigned website, which is scheduled to arrive in the first quarter of next year.
Through yesterday, the company's stock had surged 61% this year, compared with a 24% 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.
Total revenue in the third quarter gained 1.8% 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.
~ Bloomberg News ~