Updated | 9:20 p.m.
The share price for The New York Times Company stock tumbled nearly 22 percent on Thursday after posting lower-than-expected earnings.
The company reported third-quarter net income of $2.28 million on Thursday, a decline of more than 85 percent from the period a year earlier, when the company posted a large gain on the sale of investments and took a charge for paying down its debt ahead of schedule.
The net income is equal to about 2 cents a share, compared with net income of $15.7 million, or 10 cents a share, in the third quarter of 2011. Analysts had forecast income of 8 cents a share. Total revenue declined 0.6 percent, to $449 million, dragged down by continuing weakness in advertising revenue, which fell 8.9 percent, to $182.6 million, from $200.5 million.
Print advertising at the company’s newspapers, which include The New York Times, The Boston Globe and The International Herald Tribune, shrank 10.9 percent, and digital advertising across the company fell 2.2 percent.
Shares closed at $8.31, down $2.34 for the day.
Douglas Arthur, an equity analyst at Evercore Partners, an investment bank that follows The Times and has a buy on the stock, said the company performed far worse than its competitors in advertising sales. Gannett, for example, recently reported a 6.6 percent decline in publishing-related ad revenues for the third quarter.
“It was an absolute awful quarter for The New York Times; there were no ifs, ands or buts,” Mr. Arthur said. “The print being down 11 percent is a head-scratcher. We’re not seeing those kinds of drops at other companies. In fact, some companies are seeing a pickup. The Times is an outlier.”
Overall revenue was buoyed by the continued growth of paid subscriptions for the digital editions, helping increase circulation revenue by 7.4 percent, to $234.9 million, from $218.6 million.
The number of paid subscribers to the Web site, e-reader and other digital editions of The New York Times and The International Herald Tribune reached about 566,000, an 11 percent increase from the second quarter, the company said. The Boston Globe and BostonGlobe.com also grew, by 13 percent, to about 26,000 subscribers.
“While our results for the third quarter reflect continued pressure on advertising revenues, total circulation revenues rose, led by the ongoing expansion of our digital subscription base,” Arthur Sulzberger Jr., the chairman and chief executive of the Times Company, said in a statement. “Digital subscriptions have remained robust.”
Operating costs grew a modest 2.3 percent. Operating profit declined 59.6 percent, to $8.5 million, from $21 million. The loss per share on continuing operations was 2 cents compared with a gain of 4 cents a share in 2011.
In the last year, The Times has become a smaller company, selling off its regional newspaper group in January and its stake in the Fenway Sports Group in July. In the fourth quarter, the company expects to register the pretax profit from two other transactions — the $300 million sale of the About Group and the $167 million sale of the company’s interest in the job search Web site Indeed.com.
“The after-tax proceeds from these transactions further strengthened our solid liquidity position,” Mr. Sulzberger said.
The company listed debt and lease obligations of $776.9 million and cash and short-term investments totaling $614 million.
Mr. Arthur said that the balance sheet was one bright spot for The Times.
“Investors who are taking a longer term perspective on The New York Times are very pleased with the cash buildup, think they’re eventually going to do something good and smart with it for shareholders and like that the model is moving toward circulation,” he said.
Alexia S. Quadrani, an analyst at JPMorgan Chase, said investors hoped company officials would announce they were reinstating the dividend.
“Some investors were hoping for a return of cash,” Ms. Quadrani said. “We had not expected it because management has been very consistent in saying let’s wait for that new C.E.O. on board to make that strategic decision. Having said that, we do get a lot of questions from investors and I do think there was some anticipation in the market.”
In a call with analysts, Mr. Sulzberger addressed the issue of the incoming president and chief executive, Mark Thompson, the former director general of the British Broadcasting Corporation, who has been drawn into the controversy over a canceled BBC investigation into Jimmy Savile, a longtime BBC host and personality who died last year and has been accused of widespread sexual abuse.
Mr. Thompson has said that he had nothing to do with canceling the investigative report and Mr. Sulzberger on Thursday offered him his support, saying that he was satisfied by Mr. Thompson’s explanation and that “he abides by high ethical standards” and “is the ideal person to lead our company.”
“I’m proud of all that we have accomplished at the company during this time,” Mr. Sulzberger said. “With Mark Thompson joining us, it will be time for me to step away from these calls and turn the microphone over to him next quarter.”
But analysts seemed less concerned with the controversy engulfing Mr. Thompon’s past employer and more interested in seeing his plan for the company.
“He’s held in high regard by investors,” said John Janedis, a research analyst with UBS. “Operating without a C.E.O. over the past 10 months or so, they’ve executed fairly well, actually very well. But they are clearly in need of full-time leadership. Investors are very eager to hear about his one- to four-year vision.”
An earlier version of this post indicated The New York Times Company sold its regional newspaper group in December. The company announced the sale in December and completed it in January. The post also earlier referred to the Fenway Sports Group by a previous name, NESN.