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New York Times Co. Reports Rising Digital Profit as Print Advertising Falls

The New York Times Company reported substantial growth in its digital business on Wednesday, as new subscriptions helped drive gains in circulation and digital advertising revenue increased.

But the company continues to face stiff headwinds on the print side. Print advertising revenue fell 18 percent, driving a 7 percent decline in total advertising revenue for the quarter.

The company said that its digital advertising revenue rose 19 percent, to $50 million, in the first quarter, which ended in late March. It also added 308,000 net digital-only news subscriptions — the most of any quarter in its history — helping to propel an 11 percent increase in circulation revenue.

The Times counted nearly 2 million digital-only subscriptions for its news products; including subscriptions to its crossword product, it has 2.2 million total digital-only subscriptions.

Over all, the company reported total revenue of $399 million for the quarter, up 5 percent compared with the first quarter of 2016. Its net income was about $13 million, compared with a net loss of roughly $14 million in the same period a year ago.

“Print advertising remained tough,” Mark Thompson, the chief executive of The Times, said during an earnings call on Wednesday. “But it is a testimony to just how far our business has already transitioned towards digital that this steep decline did not stop us from growing our total revenue significantly in the quarter.”

He added, “We are now in rapid transition from a celebrated past as a great American newspaper to a future of even greater potential as a subscription-first, mobile-first news provider for thoughtful audiences everywhere.”

He attributed the strong growth in digital advertising revenue largely to the company’s focus on mobile, branded content and marketing and creative services.

Still, these are difficult times for all print publishers. Dean Baquet, the executive editor of The Times, has repeatedly said the newsroom will have to be smaller, and employees are anxiously awaiting staff reductions that have been looming for months. The company is also in the midst of consolidating its staff onto fewer floors at its Midtown Manhattan headquarters, and signs of construction around the building have heightened the sense of instability.

Mr. Thompson did not directly address buyouts or layoffs on the earnings call, saying only that Mr. Baquet had “made it clear that our newsroom needs to adapt and develop if we’re to seize the opportunity in front of us.” He said more information on changes in the newsroom would come “over the course of the present quarter.”

Operating costs grew about 5 percent in the quarter, to $367 million, from $352 million in the first quarter last year. Adjusted operating costs increased to $346 million, from $328 million, which the company attributed to higher marketing costs and costs from acquired companies. The company introduced a brand campaign this quarter, “The Truth Is Hard,” which included a commercial during the broadcast of the Academy Awards. “It struck a chord not just in America, but around the world,” Mr. Thompson said about the advertising campaign. “Even the president of the United States was kind enough to draw attention to it.”

Operating profit rose to $29 million in the quarter, from $28 million the previous year. Adjusted operating profit increased slightly to $53 million, from $52 million in the first quarter last year.

There were other positive signs for the company. Digital advertising revenue represented 38 percent of the company’s total advertising revenue, compared with 30 percent in the first quarter last year. Circulation revenue from digital-only news subscriptions increased 40 percent, to $73 million.

The company, however, expects second-quarter growth in the number of digital-only news subscriptions to slow compared with the previous two quarters as the effects of the so-called Trump bump — subscriptions spurred by coverage of President Trump, and his attacks on the paper — begin to wear off.

Follow Sydney Ember on Twitter @melbournecoal.

A version of this article appears in print on  , Section B, Page 2 of the New York edition with the headline: Digital Gains Spur Increase In Revenue At Times Co.. Order Reprints | Today’s Paper | Subscribe

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