(Reuters) -New York Times (NYT) added fewer digital subscribers than expected in the third quarter as readers cut back on spending in an uncertain economy, sending the publisher's shares down 8% even as ad sales jumped.
The slower subscriber growth came in the months ahead of the Nov. 5 U.S. presidential election, an event that typically boosts engagement for media companies. Fox Corp reported strong results for the same period thanks to increased political advertising.
Digital advertising sales at NYT jumped 8.8%, its strongest growth in more than two years.
Still, the company added 260,000 digital-only subscribers in the quarter, lower than the 300,000 in the previous quarter and the 280,200 expected by analysts polled by Visible Alpha.
"U.S. consumers' interest in paying for news remains limited ... (Additionally,) the subscriber miss was narrow, and could just be a function of competition," said eMarketer analyst Max Willens.
The results suggest high inflation was affecting NYT's strategy of driving growth through bundling its core news offerings with lifestyle-focused products such as Wirecutter, sports website The Athletic and games including Wordle.
The Times aims to reach 15 million digital subscribers by 2027. It crossed 11 million in the third quarter.
NYT forecast subscription revenue to increase by 7% to 9% in the fourth quarter, the midpoint of which was slightly below estimates of 8.2%, according to data compiled by LSEG.
In the third quarter, subscription revenue rose 8.3%.
Total revenue of $640.2 million was in line with estimates of $640.8 million, as digital advertising thrived.
The ad growth shows the company's lifestyle offerings are drawing marketing spend and "came even as some advertisers continue to avoid certain hard news topics", CEO Meredith (NYSE:MDP) Kopit Levien said, without elaborating on the topics.
Company executives also said they aim to reach for "a fair contact" with a union representing more than 600 technology workers at the Times as they went on strike early Monday.
Revenue from The Athletic, purchased by NYT in 2022, jumped 29.8%. The Times said it will stop breaking out subscribers for the site after the fourth quarter.
Adjusted profit was 45 cents per share, higher than estimates of 41 cents.