The weak advertising market is dragging APN News & Media's underlying earnings down, spooking investors in the process.
The newspaper and radio network owner says its underlying earnings are "slightly behind" so far this year, compared to 2013.
"As an advertising industry, agency expenditure in both Australia and New Zealand has been flat and as a result our agency revenues have been below expectations, especially in publishing," chief executive Michael Miller told shareholders at APN's annual general meeting on Thursday.
"This has been partially offset by stronger direct and local advertising revenues, as well as improving circulation trends."
APN's earnings were $A162.8 million in 2013.
The news from Mr Miller disappointed investors, with APN's shares dropping by more than 13 per cent during intra-day trade.
CMC Markets chief market analyst Michael McCarthy said investors were punishing companies that don't deliver during the latest round of quarterly earnings updates.
"It's interesting, the current market focus on expectations," he said.
"The market hit Boral hard on a weaker than expected outlook for the second half of the year, so perhaps APN is hearing an echo of that approach today."
Mr Miller was addressing his first AGM as APN's boss since taking up the role last June.
APN has recently focused on revamping its business by taking control of most of its joint venture companies, such as the Australian Radio Network, The Radio Network and iNC Digital Media.
It has also sold its stake in its APN Outdoor advertising business and online retailer BrandsExclusive plus several New Zealand newspapers and magazines.
Mr Miller said APN remained on track to reap $20 million in annual cost savings from its publishing division.
It was also in talks about forming partnerships with other publishers to help cut more costs at its newspapers, which includes several Australian regional titles and The New Zealand Herald.
APN, whose radio networks include KISS and Mix, made a $2.6 million profit in 2013, a turnaround from a $507 million loss in 2012.
Shares in APN were eight cents lower at 60 cents at 1530 AEST.
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