What happened
Shares of The New York Times Company (NYT 0.39%), publisher of the namesake newspaper, took a hit on Wednesday, falling as much as 19.6%. As of 11:30 a.m. EDT, however, shares were down about 14%.
The stock's decline follows The New York Times' second-quarter earnings release. Likely prompting the slide was a top-line figure that came in lower than expected. In addition, guidance for digital advertising revenue to decrease in Q3 may have spooked some investors.
So what
The New York Times posted second-quarter revenue of $436.3 million, up 5.2% year over year. This figure missed analysts' average estimate for revenue of $438.7 million.
Growth in The New York Times' revenue came despite an 8% year-over-year decrease in print advertising. This was because more strong growth in the company's digital subscriptions and digital advertising helped offset this headwind in print. Second-quarter digital advertising revenue increased 13.7%, and digital subscription revenue rose 14.1%.
The news company's adjusted earnings per share of $0.17 were flat compared to the year-ago quarter but ahead of analysts' consensus forecast for $0.15.
Now what
Looking to Q3, management said it expected its digital subscription revenue to continue to increase at a year-over-year rate in the mid-teens. But the company forecast digital advertising revenue to decrease at a rate "in the high-single digits" during the period.
"We expect a more challenging second half of 2019 in digital advertising revenue as a result of comparisons against strong performance in the same period in 2018," management explained in the earnings release.