New York Times Co., the newspaper publisher controlled by the Ochs-Sulzberger family, fell the most in two weeks after reporting an 11th straight quarter of declines in advertising sales.
The shares dropped 3.4 percent to $11.77 at the close in New York, the biggest one-day decrease since July 16. The stock has climbed 38 percent this year.
The Times’ advertising business slid 5.8 percent from a year earlier, faster than the 5.1 percent increase in circulation sales. Total revenue fell 0.9 percent to $485.4 million. Analysts had estimated $489.3 million on average.
The publisher, led by Chairman Arthur Sulzberger and Chief Executive Officer Mark Thompson, is focusing more on attracting paying subscribers to depend less on advertisers, who have cut spending industrywide over the past five years. The company is also selling off all assets unrelated to the Times media brand, culminating in its decision to put the Boston Globe newspaper group up for sale earlier this year.
Excluding some items, profit was 14 cents a share, the company said today in a statement. Analysts had projected 13 cents on average, according to data compiled by Bloomberg.
Digital subscribers to the New York Times and its international edition increased 35 percent to 699,000, helping fuel the gain in total circulation sales.
While online readers advanced, digital advertising dropped 2.7 percent. Print ads fell 6.8 percent. The ad industry’s increased reliance on automated buying systems for digital venues has hurt ad rates.
An accounting error led the company to overstate its total pension obligations by around $50.4 million at the end of last year. The pension plans were underfunded by about $150 million as of the end of June, the company told investors and analysts on a conference call following the earnings announcement.
Times Co. expects to complete a sale of the Globe before the end of September, Thompson said on the call. The Globe has drawn bids of about $100 million, people told Bloomberg News in June. The discussions had been hampered by disagreements with bidders over what contingencies to attach to a deal, the people said then.
Chief Financial Officer James Follo said on the call today that he doesn’t expect the Globe’s pension liabilities to be included as part of the purchase price.
The Times Co. division that manages the Globe has about $110 million in pension liabilities, according to the people. The company declined to say how much of the $50.4 million that was originally unaccounted for in the pension obligation can be applied to the Boston Globe division.
As part of Thompson’s plan to create new online products, last month the Times appointed its national editor, Sam Sifton, to run a new digital magazine. The publication will seek to replicate the success of the newspaper’s “Snow Fall” feature -- a multimedia story about an avalanche in the Cascades mountain range that drew new readers to the site.
The Times is also working on a lower-priced service, called Need to Know, that will be designed for “quick and periodic dips into the news,” according to a note from Executive Editor Jill Abramson to staff last month. Its content will be shaped by Cliff Levy, a deputy metro editor.
In addition, Abramson announced the creation of a “skunk-works team,” which will come up with digital offerings for the publisher. The group will be led by Arthur Gregg Sulzberger, the son of Arthur Sulzberger. Arthur Gregg, currently a metro editor, has been a national correspondent and metro reporter since joining the Times in 2009.
David Perpich, Arthur Gregg’s cousin and a member of the Ochs-Sulzberger family that controls the newspaper, will also be working on the company’s new digital efforts, according to Abramson’s memo.