Shares of New York Times (NYT) - Get New York Times Company Class A Report fell nearly 8% Wednesday after the publisher reported mixed third-quarter results and warned of potential fourth-quarter ad revenue headwinds.
The company reported earnings of 12 cents a share, topping analysts' expectations of 10 cents a share but below the 15 cents a share it earned a year ago. Revenue of $428.5 million fell short of analysts' $429.1 million estimates.
"Like other publishers, we're seeing continued turbulence in the digital advertising space. While digital advertising performed slightly better in Q3 than we had originally forecasted, we expect a fairly challenging fourth quarter, largely due to comparisons to a very successful Q4 of 2018," said CEO Mark Thompson.
Another concerning trend for the "Gray Lady" was operating costs, which rose to $401.5 million in the quarter from $380.8 million a year ago due to higher content costs, "including growth in the number of newsroom employees and costs related to" the company's television series, "The Weekly."
Shrinking margins led to a fall in operating profit, as the company reported adjusted operating profit of $44.1 million in the third quarter, down from $53.7 million a year earlier.
Looking ahead, the company expects total subscription revenue to rise in the low- to mid-single digit percentage range while digital-only subscriptions are expected to increase in the mid-teens.
"We remain confident in our strategy, which has a particular focus now on major advertising relationships like the recently announced multi-year deal with Verizon ... and on new advertising opportunities like podcasting," Thompson said.
The New York Times was down 7.8% to $29.43 Wednesday.