As one who, in my Motley Fool musings, looks at all manner of corporate earnings releases, I must compliment New York Times (NYSE:NYT) for disclosing its negative news for the quarter in the first paragraph of its release and not burying it three paragraphs down. And the company had at least its fair share of negative information to pass along.

For instance, earnings from continuing operations -- which the company dealt with in its first sentence -- declined 59.5% to $0.15 per diluted share, from $0.37 last year. Adjust for the special items in the quarter, and EPS clocked in at $0.34 vs. $0.37. Why the $0.19 drop? The drop, which ate up $27.5 million of net income from continuing operations, came from an after-tax loss for the sale of assets, a gain on the sale of a radio station, and an accelerated depreciation expense related to Edison plant assets.

But far more important from the perspective of the company's future was a 6.9% decline in advertising revenues within the news media group. That trend, of course, has been an ongoing occurrence at such general circulation newspaper publishing companies as Gannett (NYSE:GCI), McClatchy (NYSE:MNI), and Tribune (NYSE:TRB). Even The Wall Street Journal, with its upscale readership demographics, indicated a quarterly advertising revenue decline when its parent Dow Jones (NYSE:DJ) reported its second-quarter results last week.

Also, like its other publishing company peers, the powers at New York Times continue their efforts to juno-chop the company's costs. In the past quarter, according to Times' CEO Janet Robinson, operating costs fell about 2% -- or nearly 4%, if you exclude depreciation and amortization.

But for publishers in general and Times specifically, the question becomes one of how long costs can continuously be cut and advertising revenues atrophy before more draconian measures are needed to insure product continuity and quality. Indeed, circulation revenues slid in the quarter 0.5% as a result of "volume declines offset by higher prices."

That means simply that fewer people are buying the company's papers, but those who are, are being charged more than before. That's sort of like the old joke about the football player who was short, but slow. Based on all this, I hope my Foolish friends won't be so slow as to use their investment funds to acquire publishing company shares.

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Fool contributor David Lee Smith still hobbles down his hilly driveway each day to retrieve the local fish wrapper. He does not own shares in any of the companies mentioned. He welcomes your communiques. The Motley Fool has a disclosure policy  

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.