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New York Times Q2 Profit Tops View, But Revenues Miss

newyorktimes aug07 lt

The New York Times Co. (NYT) reported a profit for the second quarter that increased 6.7 percent from last year, while quarterly revenues rose 5.2 percent. It added 197,000 net new digital-only subscriptions in the quarter.

Adjusted earnings per share topped analysts' expectations, while quarterly revenues missed their estimates.

Mark Thompson, president and chief executive officer, the company, said, "We had another strong quarter in digital subscription growth and we're making steady progress toward our goal of reaching 10 million total subscriptions by 2025."

Looking ahead for the third quarter of 2019, the company expects total subscription revenues to increase in the low- to mid-single digits from last year. Digital-only subscription revenue is expected to increase in the mid-teens.

It anticipates total advertising revenues for the third quarter of 2019 to decline in the high-single digits compared to the previous year. Digital advertising revenue is expected to decrease in the high-single digits.

It also expects a more challenging second half of 2019 in digital advertising revenue as a result of comparisons against strong performance in the same period in 2018.

The company reported that its second-quarter net income attributable to common stockholders rose 6.7 percent to $25.17 million from last year's $23.60 million, with earnings per share improving to $0.15 from $0.14 in the previous year.

Adjusted earnings per share from continuing operations for the quarter was $0.17, unchanged from last year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.15 per share for the second-quarter. Analysts' estimates typically exclude special items.

But, operating profit for the quarter decreased to $37.9 million from $40.0 million in the prior year. Adjusted operating profit also decreased to $55.6 million from $59.4 million last year, as higher costs more than offset higher digital-only subscription revenues, other revenues and digital advertising revenues.

Total revenues for the second quarter increased 5.2 percent to $436.26 million from $414.56 million last year. Analysts expected revenues of $438.66 million for the second-quarter.

Subscription revenues increased 3.8 percent, advertising revenues increased 1.3 percent and other revenues increased 29.7 percent. Quarterly subscription revenues rose primarily due to growth in recent years in the number of subscriptions to the Company's digital-only products.

Revenue from the company's digital-only subscription products, which include news product, as well as Crossword and Cooking products, increased 14.1 percent to $112.6 million from the prior year.

The company noted that paid digital-only subscriptions were about 3.78 million at the end of the second quarter of 2019, a net increase of 197,000 subscriptions compared with the end of the first quarter of 2019 and a 30.7 percent increase compared with the end of the second quarter of 2018.

Of the 197,000 additions, 131,000 came from the Company's digital news product, while the remainder came from the Company's Cooking and Crossword products.

Today, The Times has 4.7 million total subscriptions.

Second-quarter digital advertising revenue increased 13.7 percent, while print advertising revenue decreased 8.0 percent.

Digital advertising revenue was $58.0 million, or 48.1 percent of total Company advertising revenues, compared with $51.0 million, or 42.8 percent, in the second quarter of 2018. The increase in digital advertising revenue primarily reflected growth in direct-sold advertising on our digital platforms, including podcasts and creative services.

NYT closed Tuesday regular trading at $35.58, up $0.31 or 0.88 percent.

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