Jan. 28 (Bloomberg) -- New York Times Co., the third-largest U.S. newspaper publisher, reported a fourth-quarter profit that topped analysts’ estimates and confirmed it hired Goldman Sachs Group Inc. to sell its stake in the Red Sox baseball team.

The stock gained the most in a month in New York trading. Earnings were 36 cents a share, excluding costs related to job cuts and an asset writedown, compared with the 29-cent average estimate of seven analysts surveyed by Bloomberg. Sales fell 11 percent to $772 million, the publisher said today in a statement.

The Red Sox stake may be worth $162 million, according to Rob Tilliss of Inner Circle Sports LLC. New York Times is trying to raise money as more readers search for news over the Internet, where advertising is less lucrative. The company, facing the expiration of a $400 million credit facility in May, has cut its dividend and is in discussions to sell part of its headquarters.

“Interest in ball teams isn’t affected as much by this slow market, and the Times probably needs to do this for the cash,” John Morton, a newspaper analyst and president of Morton Research Inc. in Silver Spring, Maryland, said in an interview. “The problem for anyone is going to be getting financing.”

New York Times, controlled by the Ochs-Sulzberger family, advanced 34 cents, or 6.1 percent, to $5.94 at 4 p.m. in New York Stock Exchange composite trading, the biggest one-day gain since Dec. 26. The shares have plunged 63 percent in the past year, giving the publisher a market value of about $850 million.

“We are operating as efficiently and effectively as we can,” Chief Executive Officer Janet Robinson said on a conference call.

Monthly Revenue Scrapped

Ad sales dropped 18 percent to $468.8 million in the fourth quarter. The rate of decline in print ads has accelerated this month from December, said Robinson, 59.

The New York-based publisher, the owner of the New York Times and the Boston Globe, will stop reporting monthly revenue releases and disclose sales only on a quarterly basis, executives said on the call.

The recession and frozen credit markets may pose a challenge in selling the Red Sox stake, said Tilliss, who advises investors on buying and selling teams. He isn’t involved in the stake sale.

“It’s not that easy a sale,” Tilliss said in an interview. “That’s a big check to write for any one party, particularly in this environment.”

Tilliss calculated his estimate of the Red Sox stake using a $900 million valuation for the Cubs and their Wrigley Field, which bankrupt Tribune Co. is in talks to sell to banker Tom Ricketts.

Fenway Park

New York Times bought its 18 percent stake in New England Sports Ventures in 2002, when a group of investors led by John Henry acquired the team, Fenway Park and a stake in a regional cable sports network for $700 million. The venture now also owns half of Roush Fenway Racing, a Nascar team.

It may be harder to find a buyer because it’s a minority stake, Tilliss said. “A lot of investors we talk to are looking for control positions.”

Major League Baseball’s owners will need to approve any sale, spokesman Pat Courtney said. Andrea Rachman, a Goldman Sachs spokeswoman, declined to comment.

Fourth-quarter net income fell 48 percent to $27.6 million, or 19 cents a share, from $53 million, or 37 cents, a year earlier. Sales topped the $766 million average of five analysts’ estimates compiled by Bloomberg.

Web Revenue

Revenue from the New York Times’s Web operations accounted for 12 percent of its total, compared with 11 percent in 2007’s fourth quarter, Robinson said. The company in December agreed to an average 12 percent raise for about 100 nytimes.com employees.

The publisher’s circulation revenue gained 3.7 percent due to price increases. Revenue at About.com dropped 2.9 percent to $29.8 million because of falling display advertising.

The company recorded a $19.2 million writedown for the value of its International Herald Tribune newspaper.

This month, New York Times said it was seeking as many as 50 voluntary layoffs at the Boston Globe. The publisher also negotiated $250 million in financing from Mexican billionaire Carlos Slim in exchange for warrants and a 14 percent interest rate on six-year notes.

New York Times said today its pension fund is underfunded by $625 million and it expects to start making contributions in 2010.

The company said Jan. 22 that it’s in talks with real-estate investment company W.P. Carey & Co. to sell a portion of its Manhattan headquarters. The publisher has said it could raise as much as $225 million from a sale-leaseback of the building.

Borrowing costs may increase for New York Times after Moody’s Investors Service this month lowered its rating on the publisher’s debt to three levels below investment grade. Standard & Poor’s also lowered it to three grades below junk from investment grade on Oct. 23.

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

Last Updated: January 28, 2009 16:05 EST