What To Expect From New York Times’ Q1?

May 7th, 2019 by Trefis Team
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New York Times (NYSE: NYT) is scheduled to announce its fiscal first quarter results on Wednesday, May 8. In 2018, the company’s overall revenues grew 4% y-o-y to $1.7 billion, driven by a 20% y-o-y growth in digital-only subscription revenues. NYT reported unprecedented growth in digital-only subscriptions, which grew strongly at 27% y-o-y to 3.4 million in 2018. This increase in new subscribers led to growth in NYT’s overall subscription revenues, which contribute close to 60% of total revenues. The company’s total subscriptions now stand at more than 4.3 million. Further, NYT’s advertising revenues remained flat in 2018, reflecting a 6.5% decrease in print advertising revenues, offset by an 8.6% increase in digital advertising revenues. This segment contributes more than 30% to the total revenues. Going forward, we expect NYT to continue to post an increase in revenue growth rate in Q1, driven by the positive momentum of digital subscriptions.

Our $27 price estimate for NYT’s stock is now nearly 20% below the current market price. Our interactive dashboard on How is New York Times Likely To Have Fared In Q1 outlines our detailed analysis of the company’s earnings as well as our forecast for the company’s full-year fiscal 2019 results. You can modify our forecasts to see the impact any changes would have on the company’s earnings and see more Trefis Media data here. 

Q1 Guidance

  • NYT expects its total subscription revenues to increase in the low to mid-single-digits, compared with the first quarter of 2018, with digital-only subscription revenue expected to increase in the mid-teens.
  • The company also expects its advertising revenues to decrease in the low to mid-single-digits y-o-y, with digital advertising revenues expected to increase in the mid-teens.
  • In addition, the company’s other revenues are expected to increase by approximately 50%, largely due to the growth in its commercial printing operations.
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Fiscal 2019 Outlook

  • Overall, NYT’s online subscriber base has grown from 800,000 in 2013 to 3.4 million in 2018. Going forward, we estimate NYT’s online subscriber base to be its biggest value driver and forecast this growth to pick up in the coming years and reach 4.5 million by 2022.
  • As of now, we forecast the company’s subscription revenue for 2019 to grow by 5% y-o-y. We forecast advertising revenue to remain flat to around $560 million in 2019, on the back of the continued decline in display (print) advertising offset by growth in digital advertising.
  • We also estimate NYT’s adjusted operating profit to reach $264 million, based on higher expected production expenses and SG&A costs. Based on the above estimates, and our adjustments to operating expenses, we expect NYT’s adjusted net income to grow marginally to about $0.82 in 2019.

 

 

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