(Reuters) -The New York Times Co forecast a drop in advertising revenue for the third quarter on Wednesday, as brands cut back on ad spending in the face of a global economic slowdown, sending its shares down 6.5% in early trading.
The worldwide market for online ads is feeling the heat of red-hot inflation and foreign exchange headwinds, driving advertising-dependent companies such as Snap Inc (NYSE:SNAP), Meta Platforms and Twitter Inc (NYSE:TWTR) to curb costs and temper their outlooks.
"Given the uncertain macroeconomic environment, we'll continue to look closely at costs while prioritizing investment in areas that widen our moat like journalism and digital product development," the Times' chief executive officer, Meredith (NYSE:MDP) Kopit Levien, said on a post-earnings call.
The 171-year-old company forecast subscription revenue to rise in the range of 11% to 13% in the current quarter on bets that increased investments to bolster its digital businesses will help attract more subscribers to its news, games and podcasts at a time when ad spending has been weak.
The Times acquired sports media business The Athletic and popular game Wordle earlier this year.
Subscription revenue rose more than 13% to $383.6 million, with digital accounting for about 25% of that growth in the second quarter.
"News remains core to our value proposition, but the Bundle helps ensure that The Times is indispensable to an ever-widening group of people, even as news engagement ebbs and flows," Kopit Levien said.
The company added 180,000 net digital subscribers in the reported quarter.
Excluding items, the company earned 24 cents per share, beating estimates of 19 cents.