NY Times (NYT) Beats On Q3 Earnings, Misses Revenue
Zacks Investment Research | Nov 01, 2016 11:13PM ET
After witnessing a negative earnings surprise of 8.3% in the second quarter, The New York Times Company (NYSE:NYT) managed to deliver an earnings beat in the third quarter of 2016. The company posted adjusted earnings from continuing operations of 6 cents a share that came ahead of the Zacks Consensus Estimate by a penny but declined 33.3% from the year-ago quarter.
In the reported quarter, The New York Times Company registered an increase in the number of digital subscribers and a rise in circulation revenue. The quarter also witnessed a decline in print advertising revenue but an increase in digital advertising revenue. Adjusted operating costs came in at $324.4 million during the quarter, up 1.4% year over year. Management now expects adjusted operating costs to increase in the mid to high-single digits in the fourth quarter of 2016.
The New York Times Company’s total revenue of $363.5 million fell short of the Zacks Consensus Estimate of $365 million, and decreased 1% year over year.
Circulation revenue grew 3% to $217.1 million, primarily backed by the company’s digital subscription initiatives and a rise in the home delivery price of The New York Times in 2016. Circulation revenue from digital-only subscription jumped 16.4% to $58.6 million. Circulation revenue from digital-only subscriptions to news products rose 15.4% to $56.1 million. Management now projects total circulation revenue in the fourth quarter of 2016 to increase at a rate in line with the third quarter.
Total advertising revenue came in at $124.9 million in the reported quarter, down 7.7% year over year. We observe that the rate of decline decelerated from 11.7% witnessed in the preceding quarter. Print advertising revenue fell 18.5% in the third quarter, following a decline of 14.1% in the previous quarter.
Digital advertising revenue surged 21.4% to $44.4 million, after witnessing a decrease of 6.8% in the preceding quarter. Higher digital advertising revenue came on the back of rise in revenue from mobile platform, programmatic buying channels and branded content, partly offset by a fall in traditional website display advertising.
The company saw a 9.1% drop in the display advertising category and a 17.7% fall in the classified advertising category. The diversified media conglomerate hinted that total advertising revenue in the fourth quarter is likely to decline at a rate equivalent to that of the third quarter.
Total adjusted operating profit plunged 17.7% to $39.2 million on account of a fall in print advertising revenue and higher costs, partly offset by rise in circulation revenue.
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