NY Times (NYT) Q2 Earnings Beat, Digital Subscribers Rise
Zacks Investment Research | Jul 26, 2017 10:45PM ET
The New York Times Company (NYSE:NYT) posted the fourth straight quarter of positive earnings surprise, when it reported second-quarter 2017 results. The company delivered adjusted earnings from continuing operations of 18 cents a share that came ahead of the Zacks Consensus Estimate of 13 cents and increased 63.6% from the year-ago quarter. The newspaper publisher's total revenue of $407.1 million rose 9.2% year over year and outpaced the Zacks Consensus Estimate of $394.4 million, marking the third straight quarterly beat.
Better-than-expected results and spectacular increase in digital subscribers have helped propelled the stock. In fact year to date, the stock has surged 38% and has comfortably outperformed the industry that gained 8.3%.
The quarter witnessed an increase in digital advertising and subscription revenues but a decline in print advertising revenue.
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Subscription revenue grew 13.9% to $250 million, primarily backed by the company’s digital subscription initiatives and a rise in the home delivery price of The New York Times. Revenue from digital-only subscriptions jumped 46.4% to $82.5 million. Management now projects total subscription revenue in the third quarter to increase at a rate equivalent to that registered in the second quarter.
Total advertising revenue came in at $132.2 million in the reported quarter, up 0.8% year over year. This was for the first time that total advertising revenue increased, since the third quarter of 2014, on account sturdy digital advertising. However, print advertising revenue fell 10.5% to $77.1 million in the quarter under review, following a decline of 17.9% in the preceding quarter.
Digital advertising revenue surged 22.5% to $55.2 million, after witnessing an increase of 18.9% in the preceding quarter. Higher digital advertising revenue came on the back of rise in revenues from mobile platform, programmatic buying channels and branded content, partly offset by a fall in traditional website display advertising.
The company on one hand saw a 3% drop in the display advertising category, while on the other hand it witnessed a 30.9% jump in the classified and other advertising category. The diversified media conglomerate hinted that total advertising revenue in the third quarter is likely to decline in the mid to high single digits.
Adjusted operating costs came in at $340 million during the quarter, up 6.9% year over year. Management now anticipates adjusted operating costs to increase in the mid-single digits in the third quarter. Total adjusted operating profit grew 23.2% to $67.1 million.
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