(Reuters) - The New York Times Co (NYT.N) added fewer online subscribers in the first quarter as it cut back on discounts and digital advertising sales fell, sending its shares down more than 4 percent on Thursday.
The Times added 139,000 digital subscribers in the latest quarter, compared with 348,000 a year earlier, when it offered hefty discounts for annual online subscriptions.
Huber Research analyst Craig Huber said some of the readers who purchased discounted subscriptions last year did not renew, causing the drop in additions.
Digital advertising revenue, which accounts for more than a third of the company’s total advertising sales, fell 6 percent, hurt by a fall in display advertising on its websites. In contrast, print advertising revenue recorded a smaller drop of 1.8 percent.
“We expect another down quarter in digital advertising in (the second quarter), but are confident that we will return to solid year-over-year growth in the third quarter,” Chief Executive Officer Mark Thompson said.
Total expenses rose 2.6 percent to $378 million in the quarter largely due to higher compensation costs, the newspaper publisher said.
However, digital subscription revenue rose 25.8 percent to $95.4 million.
That helped the company’s net income rise to $21.9 million, or 13 cents per share, in the latest quarter from $13.2 million, or 8 cents per share, a year earlier.
Excluding items, it earned 17 cents per share from continuing operations.
Total revenue rose to $413.9 million from $398.8 million.
Analysts on average estimated a profit of 15 cents per share on revenue of $409.1 million, according to Thomson Reuters I/B/E/S.
Reporting by Laharee Chatterjee in Bengaluru; Editing by Saumyadeb Chakrabarty and Anil D'Silva