The New Yoirk Times (NYT) beat third quarter earnings estimates but missed on the top line this morning.
Adjusted earnings per share rose to $0.13 from $0.06 last year while total revenue rose 6%.
Breaking down the company's business segments, we see that the company missed because of weakness in print advertising.
- Third subscriber revenue growth was ~in-line with guidance: +13.6% vs. 'similar to Q2's +13.9% growth'
- Digital-only sub revenue was up 46% vs. +40% guidance
advertising rev fell 9% vs. guidance for a mid-high single digit decline
advertising revenue fell 20%, down from a 10% decline in the second
- 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.
advertising revenue grew 11% vs. low double-digit guidance
- 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.
- Other revenue was up 18% vs. high teens guidance.
- Print advertising revenue fell 20%, down from a 10% decline in the second quarter.
Importantly, digital-only subscriber net additions increased to 154K (+14% year-over-year) from 114K in the second quarter. Digital-only subscribers are up 59% to 2.49 million.
CEO Mark Thomson said, "These results reflect the ongoing strength of our digital strategy and continued demand for quality, in-depth journalism."
Subscribers have surged in the face of the ‘strong news cycle' amid continued controversy in the Trump administration. The stock is up ~42% year-to-date.
The company expects fourth quarter subscription revenue growth in the high-teens (+10% excluding the extra week) and advertising revenue down in the high-single digits (low double-digits excluding the extra week).
NYT has a $3.1 bln market cap and trades at just under 10x EV/EBITDA.