The company said it cut its operating costs by 20 percent to manage the revenue falloff, following a pattern that also emerged in recent earnings reports from fellow newspaper publishers Gannett Co. and McClatchy Co.
The company also signaled that this year's punishing advertising slump may be starting to break. While ad revenue fell 30 percent across the company, Times Co. CEO Janet Robinson said "the rate of decline lessened throughout the quarter."
The publisher of The New York Times, The Boston Globe, The International Herald-Tribune and 15 other daily newspapers said Thursday that it earned $39.1 million, or 27 cents per share, from April through June. That compares with a profit of $21.1 million, or 15 cents per share, in the same quarter a year ago.
The company was helped by a favorable tax adjustment, which boosted earnings by $37.7 million, or 26 cents per share.
But even after one-time events, the company said it would have earned 8 cents per share. On that basis, analysts polled by Thomson Reuters expected a loss of 4 cents per share.
Still, shares fell 27 cents, or 4.1 percent, to $6.35 in morning trading after initially running higher. Shares were up 88 cents at $7.50 in trading before the market opened.
"Cost cutting is fine," said Ed Atorino, a media analyst with Benchmark Co. "But revenues aren't looking too great - pretty much across the sector. And Times revenue was worse than expected."
Times Co. revenue fell 20 percent to $584 million. Analysts were expecting $603 million.
Advertising revenue plunged 30 percent - worse than the 27 percent year-over-year decline the Times Co. posted in the first quarter, when it had a net loss of $74.5 million.
Even revenue from Internet advertising, which had been growing before the recession deepened last year, tumbled 15.5 percent in the second quarter to $68 million.
Given the declines, the company is scrambling to slash expenses and sell assets. It had a debt load of roughly $1 billion at the end of last year, which it has cut by about $45 million.
The Times Co. managed to wring $20 million in annual cost concessions from unions at The Boston Globe over the past few months after threatening to shut down the newspaper. That should make it easier for the Times Co. to find a buyer for the Globe, which was projected earlier this year to lose $85 million in 2009.
The company is also looking to sell its 17.5 percent stake in the Boston Red Sox. It has already agreed to sell WQXR-FM, a New York City classical music station, for $45 million.
Most employees at the flagship New York Times newspaper have taken a 5 percent pay cut through the end of the year. The company hopes the move will trim costs by $4.5 million and save about 80 jobs, most of them in the newsroom. The Times said in March it was cutting about 100 workers from the business side of the newspaper.