New York Times plunges as advertising slump leads to surprise loss


New York

The New York Times Co. on Thursday tumbled the most in at least three decades after reporting a surprise loss on falling advertising sales, adding to the challenges for incoming Chief Executive Officer Mark Thompson.

Times Co. plunged 22 percent to $8.31 in New York, the biggest one-day drop since at least 1980. The stock, up 38 percent this year through yesterday, led decliners in the Russell 2000 Index Thursday.

The publisher's struggles reflect mounting challenges for the newspaper industry as it tries to compensate for shrinking print-ad sales with Internet revenue. Advertisers are growing squeamish on fears that the economy will worsen, which will probably cause the print business's slump to continue into the fourth quarter, Times Co. said.

"We are hearing from business leaders that they are extremely concerned," Chief Advertising Officer Denise Warren told analysts Thursday on a conference call.

The loss from continuing operations was 1 cent a share, excluding severance and other costs, the New York-based company said today in a statement. Analysts had estimated a profit of 8 cents on average, according to data compiled by Bloomberg.

The company's print-ad sales for the period dropped 11 percent, and overall ad revenue declined 8.9 percent. Print sales trends will probably be similar in the fourth quarter, the company said.

"A very disappointing third quarter," said Douglas Arthur, an analyst with Evercore Partners Inc. who has rated the stock the equivalent of buy since August 2010. "Very weak advertising and higher costs than expected."

Advertising has fallen across all categories for the newspaper industry, dropping 6.6 percent in the first six months of this year, according to the most recently available data from to the Newspaper Association of America.

Bearish options wagers against the Times Co. had climbed to the highest level ever. The ratio of outstanding puts to sell the stock versus calls increased almost 30-fold in two days to 4.1-to-1 on Oct. 22, an all-time high, according to data compiled by Bloomberg. A block of 8,500 January $10 puts changed hands that day after 10,000 traded at the end of last week. Those options tripled in value today, the data show.

Gannett Co., publisher of USA Today, fell 5.2 percent to $16.84 at the close in New York, the most since June 1.

Times Co. has operated without a permanent CEO since December. Thompson, who is scheduled to take over Nov. 12, faces questions over how his former employer, the British Broadcasting Corp., handled a sex scandal, marring his move to the New York Times.

Last December, reporters for the BBC show "Newsnight" prepared a broadcast featuring interviews with women saying they had been sexually abused as children by Jimmy Savile, a popular BBC presenter. Savile died in October 2011.

Top editors at the BBC knew of the pending report, including BBC News Director Helen Boaden, according to people familiar with the matter. Boaden reported to Thompson, who has said he knew nothing of the Savile report and had no involvement in its cancellation.

"Mark has provided a detailed account of that matter and I am satisfied that he played no role in the cancellation of the segment," Chairman Arthur Sulzberger Jr. said on a conference call with analysts Thursday after the earnings were released.

Thompson "possesses high ethical standards and is the ideal person to lead our company as we focus on growing our businesses through digital and global expansion," he said.

Times Co.'s net income dropped 85 percent to $2.3 million, or 2 cents a share, compared with $15.7 million, or 10 cents, a year earlier, the company said. Revenue was little changed at $449 million. Analysts had projected $479.4 million. The company had severance costs of $3 million before tax in the quarter, which it attributed to normal departure-related expenses.

Digital ad revenue fell 2.2 percent to $44.6 million, while subscribers to online editions of the New York Times and International Herald Tribune increased 11 percent to 566,000 since the end of June.


— With assistance from Niamh Ring and Nikolaj Gammeltoft in New York.

Start your day with The Independent, sign up for daily news emails
i100 In this video, the late actor Leonard Nimoy explains how he decided to use the gesture for his character
Robert De Niro has walked off the set of Edge of Darkness
news The Godfather Part II actor has an estimated wealth of over $200m
Arts and Entertainment
Fearne Cotton is leaving Radio 1 after a decade
radio The popular DJ is leaving for 'family and new adventures'
Robbie Savage will not face a driving ban
football'Mr Marmite' faced the possibility of a 28-day ban
Have you tried new the Independent Digital Edition apps?
ebooksA special investigation by Andy McSmith
Life and Style
Nearly half of all young people in middle and high income countries were putting themselves at risk of tinnitus and, in extreme cases, irreversible hearing loss
health Nearly half of all young people in middle and high income countries are at risk of tinnitus
It was only when he left his post Tony Blair's director of communications that Alastair Campbell has published books
people The most notorious spin doctor in UK politics has reinvented himself
Arts and Entertainment
arts + ents
Life and Style
Arts and Entertainment
James Franco and Zachary Quinto in ‘I Am Michael’
filmJustin Kelly's latest film tells the story of a man who 'healed' his homosexuality and turned to God
Arts and Entertainment
Public Service Broadcasting are going it alone
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Sauce Recruitment: Retail Planning Manager - Home Entertainment UK

salary equal to £40K pro-rata: Sauce Recruitment: Are you available to start a...

Ashdown Group: Front-End Developer - London - up to £40,000

£35000 - £40000 per annum: Ashdown Group: Creative Front-End Developer - Claph...

Recruitment Genius: Product Quality Assurance Technologist - Hardline & Electric

£18000 - £24000 per annum: Recruitment Genius: The role in this successful eco...

Ashdown Group: QA Tester - London - £30,000

£28000 - £30000 per annum: Ashdown Group: QA Tester - London - £30,000 QA Tes...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower