It’s a dreary day for the Grey Lady: The New York Times Co stock is down nearly 20% in mid-afternoon trading following an earnings report that showed surprisingly weak ad sales in Q3. The company reported net income of $2.3M, down 85.5% vs the same period last year, on revenues of $449.0M, -0.6%. Revenues were well short of Wall Street’s $479.2M consensus estimate. Operating costs ate up more than 98% of the revenues. Factoring out $6M in revenue from the About Group — which the Times sold to IAC/InterActive Corp in late September — the company’s continuing operations generated a loss of 2 cents a share. Analysts thought they’d see an 8 cent profit. The biggest disappointment was the 8.9% drop in advertising, to $182.6M, with declines in financial, entertainment, department stores, and real estate. The company says it expects little change in Q4 ad sales. The drop in ad sales offset a 7.4% gain in circulation to $234.9M — mostly from increasing digital subscriptions and price increases. Digital subs increased 11% from the end of Q2 to 592,000. The $300M sale of About “will allow us to enhance our focus on our core business of generating and distributing high-quality journalism,” CEO Arthur Sulzberger Jr. said.