April 21 (Bloomberg) -- New York Times Co. fell the most in almost 22 years in U.S. trading after reporting a 27 percent drop in first-quarter advertising revenue and saying that the rate of decline won’t slow until at least the second half.

The net loss expanded to $74.5 million, or 52 cents a share, from $335,000 a year earlier, the newspaper publisher said today in a statement. Sales fell 19 percent to $609 million, trailing the $634.3 million average of four analysts’ estimates compiled by Bloomberg.

Times Co. cut jobs, slashed pay, halted its dividend and sold assets to help preserve cash after ad revenue slipped 13 percent last year. It’s seeking to sell its minority stake in the Boston Red Sox baseball team and is negotiating additional pay and job cuts with unions.

“It’s clear from these results that it’s a very, very bad environment for newspapers,” Edward Atorino, a New York-based analyst at Benchmark Co., said in an interview. “There’s no sign of relief.”

Atorino, who recommends holding the shares, estimated ad sales may fall 18 percent in the second quarter.

Excluding a 7-cent loss on leases and 11 cents for severance costs, Times Co. posted a loss of 34 cents per share, compared with the average analysts’ estimate of a 3-cent loss.

The New York-based publisher dropped 91 cents, or 16 percent, to $4.94 at 4:04 p.m. in New York Stock Exchange composite trading, the biggest drop since Oct. 19, 1987, the so- called Black Monday crash. The shares have fallen 33 percent this year, while the Standard & Poor’s 500 Media Index slipped 8 percent.

Red Sox Stake

Chief Executive Officer Janet Robinson said the company was “progressing” in its discussions to sell the Red Sox stake and is considering new methods for building revenue at its Web site, including charging for some content.

Industrywide advertising sales may plummet 22 percent this year, Barclays Capital has estimated. Last year, they dropped 17 percent, according to the Newspaper Association of America. Gannett Co., the largest U.S. newspaper publisher, last week reported a 60 percent decline in first-quarter profit as total revenue fell 18 percent.

Ad sales will decline in the second quarter at a similar pace as in the first, New York Times said.

“Advertisers as the economy improves will understand that they have a strong need to advertise,” Robinson said on the conference call. “That bodes well for a stronger third and fourth quarter.”

‘Saving Dollars’

Advertisers may be “saving dollars in the first half to do possibly more in the second half,” she said.

Ad sales at the New England Media Group, which includes the Globe and the Worcester Telegram & Gazette, fell 32 percent, the most among Times Co.’s units. Revenue at the division declined 21 percent to $104.5 million.

Times Co. has said it may close the Boston Globe if the newspaper can’t agree with unions on $20 million in savings, according to the Boston Newspaper Guild.

Ad revenue at the New York Times Media Group, which publishes the namesake newspaper and the International Herald Tribune, dropped 27 percent to $201.2 million. The New York Times won five Pulitzer Prizes yesterday for reporting, photography and criticism, the most for any newspaper this year.

The ad decline will probably bottom out this year, said Thyra Zerhusen, managing director at Optimum Investment Advisors, which held 4.7 million Times Co. shares on Dec. 31.

“They have to do a better job monetizing their online revenues,” she said in an interview on Bloomberg Television.

Circulation revenue rose in all of Times Co.’s divisions.

Times Co. trimmed operating expenses 9.5 percent to $654.3 million, helped by the closing of a newspaper distributing unit.

To contact the reporter on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net

Last Updated: April 21, 2009 16:46 EDT