Things have officially gone from bad to worse at the New York Times Co.

A weak advertising market drove the media company to swing into the red during the first quarter. It reported a loss of $335,000 versus earnings of $26.9 million during the same period last year. Excluding special charges, it earned $0.04 cents per share, which is well below Wall Street's $0.14 per share expectation.

Revenue fell 5 percent to $748 million.

"Advertising revenues decreased in the quarter as weaker economic conditions compounded the effects of secular change in our business," said chief executive Janet Robinson in a statement.

Also on Portfolio.com: Troubled Times Full coverage of the battle for the board of America's most influential newspaper.

There were a few positive numbers, however. Online advertising rose 16 percent in the quarter, and circulation managed to eke out a 2 percent gain. But total advertising revenues fell more than 9 percent. Operating profits at its news-media group plunged 78 percent.

Earlier this week, the New York Times said it expects to lay off some of its newsroom staff as part of a cost-cutting effort. It first offered buyouts to employees, but it failed to get enough volunteers to reach the head count it needs to reduce.

During the quarter, the company avoided a proxy fight with an investor group led by activist investor Scott Galloway and the hedge fund Harbinger Capital. The New York Times agreed to add two board seats to accommodate two of the investor nominations. Shareholders will vote on the board at the company's annual meeting next week.

The company expects the advertising slump to continue, and it anticipates reporting a decline in the "mid-single digits" for April, according to Robinson. "During the balance of the year, we plan to stay focused on what we do best—producing high-quality journalism, introducing new products in print and online, and stringently managing our costs.”

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