The New York Times Co. (NYSE: NYT), publisher of the third-largest U.S. newspaper by circulation, is expected to report higher earnings in the second quarter on lower revenue as print advertising is flat but online subscribers increase.

The New York-based company will report its second-quarter earnings before markets open on Thursday. It is expected to have earnings of 13 cents per share, up 8.3 percent from the second quarter of 2011, according to Zacks. Revenue is expected to fall 11.4 percent to $510.9 million.

Print advertising has crashed for the newspaper industry as companies seek cheaper online options or cut back budgets in the soft economy. This trend remains the New York Times Co.'s primary financial concern, said analysts.

The newspaper business continues to see declines, said Edward Atorino, an analyst with the New York-based Benchmark Co. LLC.

However, the Times has gained 454,000 online subscribers since implementing a paywall for NYTimes.com, according to its latest figures, an amount that's expected to grow. Earlier this year, the company also created a paywall for BostonGlobe.com and had 18,000 paying subscribers as of April. Analysts and investors have praised the company for creating this additional revenue stream, although some question if it can continue to gain subscribers in the face of intense online competition from free media.

The Times and its archrival, News Corp. (Nasdaq: NWSA)'s Wall Street Journal, have expanded their online video offerings, particularly in anticipation of November's presidential election. But they have yet to gain lucrative advertising for video. It's going to be years before it matters. They can't get big prices, said Atorino.

The company has sold many of its non-core assets, including a stake in the Boston Red Sox, and regional newspaper companies. It continues to operate About.com, an information website on a variety of topics. That segment of its business has been challenged by competition from other websites and Google's changes to its search algorithm, Arthur Sulzberger Jr., chairman of the New York Times Co., said during the annual stockholders meeting in April.

The Times is also searching for a new CEO after the departure of longtime CEO Janet Robinson last year. It is also engaged in prolonged pension negotiations with its employees, represented by the local Newspaper Guild.

New York Times shares fell 1.26 percent to $7.05 at Tuesday's close. The stock is down 8.8 percent year to date.