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New York Times Co. Reports a Loss, and a Fall in Digital Ad Revenue

The New York Times Company posted a net loss for the second consecutive quarter, in part because of severance costs related to the closing of the company’s editing and prepress operations in Paris.

The company had strong growth in digital subscriptions, it said on Thursday, but digital advertising revenue, which has been a bright spot in the past, declined.

In its earnings release, the company said that it had added 51,000 net digital-only subscriptions in the quarter for its news products and 16,000 net crossword product subscriptions. The Times now has about 1.2 million digital-only subscriptions for its news products and more than 1.4 million total digital-only subscriptions, an increase of more than 25 percent compared with the same time a year ago.

During an earnings call with investors, Mark Thompson, the company’s chief executive, struck an optimistic tone. “It was an excellent quarter for audience growth, engagement and our digital subscription business,” he said, adding that The Times drew 126 million unique users in June, and that engagement for nonsubscribers increased 20 percent year-over-year.

In the next quarter, The Times expects to add 55,000 to 60,000 net digital-only subscriptions for its news products and roughly 15,000 net subscriptions to its crossword product.

The company reported a slight net loss of about $500,000 for the quarter, compared with net income of $16 million in the second quarter of 2015. The company took a charge of roughly $12 million, largely in severance costs related to the Paris closings.

Total revenue fell 3 percent, to $373 million from $383 million, in the same quarter a year earlier, as The Times continued to struggle with declining advertising revenue. Total advertising revenue fell about 12 percent, to $131 million. Print advertising revenue slid 14 percent in the quarter, and digital advertising revenue dropped 7 percent, to $45 million. Digital advertising revenue now accounts for more than a third of the company’s total ad revenue.

“Digital advertising was somewhat lower than we expected for the quarter,” Mr. Thompson said. Increases in mobile, branded content and programmatic advertising, he added, were “not enough to offset declines in web home page and other traditional display advertising.” The company expects total advertising revenue to continue to decrease in the mid-single digits next quarter, though it anticipates double-digit growth in digital advertising.

Circulation revenue increased about 3 percent, to $219 million, as growth from the company’s digital subscription revenue and an increase in home-delivery prices offset a decline in print copies sold. Total daily print circulation declined 6 percent in the quarter, and Sunday circulation fell 4 percent. Circulation revenue from digital-only subscriptions increased 15 percent, to $56 million.

Adjusted operating profit, the company’s preferred method of assessing performance, decreased to $55 million in the quarter, from $64 million in the year-ago period.

Like many newspapers faced with declining print circulation and falling advertising revenue, The Times has looked for new revenue opportunities. It has focused on virtual reality, video and branded content, for example, and pushed aggressively into Facebook Live. The company produced more than 400 Facebook Live videos in the quarter, Mr. Thompson said.

In February, The Times announced a sweeping strategy review of the newsroom that will include reshaping the newsroom for the digital age and identifying areas for cost-cutting. The company also aims to double its total digital revenue to $800 million by 2020. “We’re taking a good, hard strategic look at costs,” Mr. Thompson said. “You can expect to hear more about that on future earnings calls.”

Charges related to the company’s recent buyout offerings were not reflected in this quarter’s earnings. About 80 Times employees took buyouts. The Times expects to take a severance charge next quarter of about $11 million resulting from the buyouts.

A version of this article appears in print on  , Section B, Page 2 of the New York edition with the headline: Times Co. Reports Loss, and a Drop in Digital Ads. Order Reprints | Today’s Paper | Subscribe

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