UPDATE 3-New York Times profit falls, newsstand price rises

(Adds New York Times newsstand price increase)

By Robert MacMillan

NEW YORK, July 23 (Reuters) - New York Times Co (NYT.N: Quote, Profile, Research) said on Wednesday its quarterly profit fell with a 12 percent decline in newspaper advertising, but results beat Wall Street forecasts on cost cuts and higher newspaper prices.

Circulation revenue rose 2.5 percent at the Times Co, which also said that it plans to raise the newsstand price of its flagship paper again. Starting in August, the Monday to Saturday editions of The New York Times will cost $1.50, up from $1.25.

Second-quarter results also included employee buyout costs of nearly $16 million as the company whittles down staff, compared with $2.8 million in similar expenses a year earlier.

"During the quarter, we saw the continued effect on our business of the U.S. economic slowdown and secular forces playing out across the media industry," Chief Executive Janet Robinson said in a statement, citing continued softness in print classified advertising.

The Times expects advertising challenges will persist "in a faltering economy" for the rest of the year, Robinson told analysts on a conference call on Wednesday.

Second-quarter income from continuing operations fell 5.5 percent to $20.9 million, while earnings per share from continuing operations were flat at 15 cents.

Not counting the buyout costs, the Times reported earnings of 26 cents a share, beating analysts' average forecast of 22 cents, according to Reuters Estimates.