NEW YORK—The New York Times Co. reported sharply lower revenue from advertising, particularly in print, but third-quarter profit beat most expectations as the paper continues its rapid shift to digital subscriptions.
Shares rose almost 2 percent in midday trading with the company reporting rising circulation revenue as it pushes digital operations aggressively.
“This quarter proved yet again that The New York Times has a very compelling digital revenue story to tell,” said CEO Mark Thompson. “We saw exceptional gains in our digital consumer business, with a net increase of 116,000 subscriptions to our news products, more than twice as many as the same quarter last year and far more than any quarter since the pay model launched in 2011.”
But the shift is costing the company in the near term.
Third quarter profit was $406,000, down from $9.4 million during the same period last year, as the company paid $2.9 million in severance costs as it cut staff and another $5 million as part of an ongoing pension plan arbitration matter.
The company said lower print advertising revenues and higher advertising and technology costs also cut into profit.
A decrease in sales of its print edition was offset by a price increase for home delivery.
Per-share profits came in at less than a penny, compared with 6 cents last year. Adjusted for severance payments and other non-recurring costs, however, profit from continuations was 6 cents, three cents lower than last year.
That was a penny better than Wall Street had expected, according to analysts surveyed by Zacks Investment Research.
Revenue was $363.5 million in the period, close to the $367 million in the third quarter of 2015.