Shares of newspaper publisher The New York Times Co. slid Wednesday after the company said a key profit measure slipped, revenue missed Wall Street expectations and it warned of challenging times in digital advertising for the remainder of the year.
The company continued to add digital-only subscriptions in the second quarter — it has been a media-industry success story in its ability to sign up significant numbers of new customers. It said that profitability declined because of its investments in its subscriptions business.
It added 197,000 digital-only subscriptions, to its news service and also its cooking and crosswords features, bringing digital subscriptions to 3.8 million. The company has 4.7 million total subscriptions.
Subscription revenue rose 3.8% to $270.5 million, and the company expects a similar increase in the third quarter.
But CEO Mark Thompson said that digital advertising will be “somewhat more challenging” in the second half of the year because it follows large gains in 2018.
In the second quarter, digital ad revenues rose 13.7% to $58 million. The company expects digital-ad revenue to drop in the third quarter. Print ad revenues, which have long been dropping, fell 8% to $62.8 million. Overall ad revenue rose 1.3% to $120.8 million.
The New York Times Co. said overall net income rose 6.7% to $25.2 million, but a key profit measure that strips out tax and interest expenses slid 5.2% to $37.9 million.
Earnings adjusted for one-time items came to 17 cents per share, topping Wall Street expectations of 15 cents, according to FactSet. Revenue rose 5.2% to $436.3 million but was short of Wall Street’s forecast of $440 million.
The New York-based company’s shares fell $4.31, or 12%, to $31.27 in late morning trading. The stock had increased 60% since the beginning of the year.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on NYT at https://www.zacks.com/ap/NYT