Time‘s revenue fell short of analysts’ targets in the third quarter, as it sold fewer magazines and advertisements but a tight leash on costs helped the publisher maintain its yearly forecast for operating income.
Shares of the New York-based owner of Time, Sports Illustrated and People magazines, rose 8 percent to $10.80 on Thursday morning.
An increase in Time’s digital advertising revenue failed to offset a steep fall in print advertising, as more and more advertisers desert the medium for online channels such as Google and Facebook.
Amid the downtrend in print, Time has said it would look at selling assets including Time Inc UK and a majority stake in Essence magazine. The assets it had earmarked for a potential sale represented about $488 million in revenue for the year ended June 30.
To lower its heavy reliance on magazine sales and print advertisements, Time has announced investments in online video, TV programming and events.
Its magazines revenue fell 14 percent to $433 million in the quarter ended Sept. 30, reflecting a continued shift in consumer preferences away from print and toward online media.
Time’s total revenue slipped 9.5 percent to $679 million, missing analysts’ estimates of $693.5 million, according to Thomson Reuters I/B/E/S. It marked the sixth straight quarter the company had missed expectations for revenue.
“With print under tremendous pressure and digital not yet growing fast enough, the company is a long way from their goal of sustainable top-line growth, notwithstanding an excellent, ongoing job on costs,” said Huber Research Partners analyst Douglas Arthur.
Time’s selling, general and administrative expenses fell 14.4 percent to $279 million.
That and other cost-cutting efforts helped the company maintain its 2017 forecast for adjusted operating income before depreciation and amortization at at least $400 million.
The company on Thursday also disclosed that it received a subpoena in July from the U.S. Securities and Exchange Commission that requires Time to produce documents relating to certain goodwill and asset impairments costs.
Net income attributable to Time Inc was $13 million or 14 cents per share, compared to a net loss of $112 million or $1.13 per share a year ago.
Excluding one-time items, Time earned 36 cents per share. Analysts on average had expected 29 cents.