New York Times Q3 Profit Tops View, But Revenues Miss

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(RTTNews.com) – New York Times Company ( NYT ) reported that its third-quarter 2017 net income attributable to common stockholders significantly increased to $32.33 million from $406 thousand last year. Earnings per share from continuing operations were $0.20 compared with $.00 in the same period of 2016.

Adjusted earnings per share from continuing operations were $0.13 in the third quarter of 2017 compared with $0.06 in the third quarter of 2016. Analysts polled by Thomson Reuters expected the company to report earnings of $0.08 per share. Analysts’ estimates typically exclude special items.

Operating profit was $33.0 million in the third quarter of 2017 compared with $9.0 million in the same period of 2016, largely due to higher digital subscription revenues and lower severance costs, which more than offset lower print advertising revenues. Adjusted operating profit was $56.5 million in the third quarter of 2017 compared with $39.2 million in the third quarter of 2016, principally driven by strong digital subscription revenues, which were partially offset by lower print advertising revenues.

Subscription revenues in the third quarter of 2017 rose primarily due to significant growth in recent quarters in the number of subscriptions to the Company’s digital-only products, as well as the 2017 increase in home-delivery prices for The New York Times newspaper, which more than offset a decline in print copies sold. Revenue from the Company’s digital-only subscription products increased 46.3 percent compared with the third quarter of 2016, to $85.7 million.

Paid digital-only subscriptions totaled approximately 2,487,000 at the end of the third quarter of 2017, a net increase of 154,000 subscriptions compared with the end of the second quarter of 2017 and a 59.1 percent increase compared with the end of the third quarter of 2016. Of the 154,000 additions, 105,000 came from the Company’s digital news products, while the remainder came from the Company’s other digital products.

Third-quarter print advertising revenue decreased 20.1 percent, while digital advertising revenue increased 11.0 percent. Digital advertising revenue was $49.2 million, or 43.3 percent of total Company advertising revenues, compared with $44.4 million, or 35.5 percent, in the third quarter of 2016. The decrease in print advertising revenues resulted from a decline in display advertising, primarily in the luxury, travel, real estate, media, technology and telecommunications categories. The increase in digital advertising revenues primarily reflected increases in revenue from smartphone, programmatic and branded content, partially offset by a continued decrease in traditional website display advertising.

On a 14-week basis , Total subscription revenues in the fourth quarter of 2017 are expected to increase in the high-teens compared to the fourth quarter of 2016. Total advertising revenues in the fourth quarter of 2017 are expected to decrease in the high single-digits compared with the fourth quarter of 2016. Operating costs and adjusted operating costs are expected to increase in the high-single digits in the fourth quarter of 2017 compared with the fourth quarter of 2016.

On a comparable 13-week basis, excluding the impact of the additional week, total subscription revenues in the fourth quarter of 2017 are expected to increase approximately 10 percent compared to the fourth quarter of 2016. Total advertising revenues in the fourth quarter of 2017 are expected to decrease in the low double-digits compared with the fourth quarter of 2016.

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