New York Times Q3 Earnings Preview: What To Expect
The New York Times Company (NYSE: NYT) is scheduled to report its third quarter results on Wednesday, November 1. NYT has been seeing impressive subscriber figures in the past few quarters, particularly digital subscribers, partially offsetting the print circulation pressure. This surge in the newspaper’s subscriptions is largely being driven by the current political climate in the U.S.
In the previous quarter, NYT’s total subscription revenues increased 14% year-over-year (y-o-y), with digital-only subscription revenue growing strongly at 46% y-o-y to $83 million. In addition, the company’s advertising revenues grew 1% y-o-y, despite continued headwinds in print advertising (-11%), again driven by very strong digital advertising growth (23%) in the second quarter. The company also posted adjusted earnings of 18 cents, up 64% y-o-y. The company’s stock has gained more than 40% in 2017 alone, and is up 74% since the U.S. election.
Our $16 price estimate for NYT’s stock is around 20% below the current market price.
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Digital Subscriptions Boost Revenues
NYT’s total digital-only subscription revenues grew 9% quarter-over-quarter (q-o-q) in Q4, due to a more than tenfold increase in the newspaper’s daily subscription sign-ups following the presidential election. The company continued to attract readers after the election as well, and saw an almost 25% jump in digital subscribers from 1.85 million to 2.3 million in Q2. This jump boosted an already strong 2016 performance that saw digital subscribers grow by over 45% y-o-y. In Q2 alone, the paper added a net increase of 93,000 subscriptions to the digital news product.
Q3 Guidance
Going forward, we expect continued year-over-year growth in the third quarter of 2017 as well, but at a slower rate than in the prior three quarters, followed by strong growth thereafter. In Q3, Reuters’ compiled analyst estimates forecast revenues of $389 million and earnings of 8 cents per share, implying a growth of about 7% and 33%, respectively.
NYT expects its digital subscription revenue to grow at a solid 40% y-o-y in the third quarter. However, the company also expects its overall advertising revenues to decline, despite double-digit growth expectations for digital advertising.
Have more questions? Please refer to our complete analysis for New York Times
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