Updated from 10:42 a.m. EDT

New York Times ( NYT) surprised Wall Street Tuesday with a third-quarter earnings report that showed gains in circulation revenue and a better-than-expected advertising performance amid tough conditions in the publishing industry.

The Gray Lady owner logged net income of $13.4 million for the quarter, up from $12.6 million a year earlier. Earnings per share were flat at 9 cents.

Excluding one-time items, New York Times earned 15 cents a share, well above Wall Street's expectation of 5 cents, according to Thomson First Call.

Total revenue rose 2% for the quarter to $754.4 million, surpassing the $733.6 million that analysts had forecast.

Shares of New York Times recently were rallying 6%, having recently been hovering near 10-year lows after Morgan Stanley Investments sold its 7.2% stake in the publisher.

Morgan Stanley portfolio manager Hassan Elmasry had complained about corporate governance practices at New York Times, and, among other things, called for the company to abandon its dual-class share structure, which preserves control in the hands of the Ochs-Sulzberger family.

The company rebuffed his demands, and Elmasry's decision to sell his fund's stake ended an effort that had sparked optimism that the struggling company may adopt changes to boost its value. The publisher, along with its counterparts in the newspaper industry, is suffering amid a downturn in the print advertising market that has been exacerbated by the rise of the Internet.

That said, Tuesday's earnings report provided some fodder for fans of New York Times. The company's circulation revenue rose 3.9% in the quarter, following an increase in newsstand and home delivery prices in July.

Advertising revenues were basically flat, slipping just 0.1%. At the core news media group, however, ad revenue declined 1.4%. At its New England Media Group, which includes the struggling Boston Globe, ad revenue tumbled 9%.

"We think New York Times has one of the strongest brands in media, with a compelling national advertising offering and favorable readership demographics," said JPMorgan analyst Frederick Searby in a research note. "However, continued weakness at The Boston Globe and more recent trends at its Regional Media Group make us somewhat cautious on the stock."

The company's Internet revenue, which includes results from its newspaper sites and About.com, increased 26.5% to $79.7 million.

"Our very strong earnings growth was driven by increased national advertising, higher circulation revenues and our continued focus on cost controls," said New York Times President and CEO Janet Robinson. "Revenues benefited from new products both in print and online. National advertising grew significantly, up 10.9%, as a result of improvement in categories such as entertainment, international fashion and corporate."

September, the final month of the quarter, proved to be a strong period for the publisher, with advertising revenues up 5.5% as a jump in national advertising outweighed declines in retail and classified.

"To date in October, advertising is not as strong as it was in September, although it is performing better than in the first half of the year," said Robinson.

Shares of New York Times recently were up $1.08 to $19.49.

More from Stocks

How Small-Cap Stocks Can Protect Your Portfolio From a Trade War

How Small-Cap Stocks Can Protect Your Portfolio From a Trade War

Week Ahead: Trade Fears and Stress Tests Signal More Volatility To Come

Week Ahead: Trade Fears and Stress Tests Signal More Volatility To Come

3 Great Stock Market Sectors Millennials Should Invest In

3 Great Stock Market Sectors Millennials Should Invest In

Why Millennials Are Ditching Stocks for ETFs

Why Millennials Are Ditching Stocks for ETFs

Trump's 'Space Force' Could Launch a $1 Trillion Industry, Morgan Stanley Says

Trump's 'Space Force' Could Launch a $1 Trillion Industry, Morgan Stanley Says