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New York Times Co. shares jumped 10% Wednesday, after the newspaper group trounced earnings estimates for the second quarter, announced it has reached more than 8 million digital subscribers and said advertising revenues rose more than 66%.
The company
NYT,
posted net income of $54.3 million, or 32 cents a share, for the quarter, up from $23.7 million, or 14 cents a share, in the year-earlier period. Adjusted per-share earnings came to 36 cents, ahead of the 27 cents FactSet consensus.
Revenue rose 23.6% to $498.5 million from $403.8 million a year ago, also ahead of the $488.0 million FactSet consensus.
Subscription revenues rose 15.7% to $339.2 million, ad revenues rose 66.4% to $112.8 million and other revenue rose 8.7% to $46.5 million.
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The company added 142,000 net digital subscribers with 77,000 in news and 65,000 in cooking and games, said CEO Meredith Kopit Levien. However, that was the lowest number since the second quarter of 2018, when it added just 109,000 digital subscribers.
“We saw moderated growth in net subscription additions in the second quarter, which we expected given that the second quarter is traditionally our softest of the year, and we were comparing against last year’s historic results at the beginning of the Covid crisis,” she said in a statement.
The company is still expecting its annual net subscriber additions to be in the range seen in 2019, “although that remains difficult to predict with precision,” she said.
“And we believe that while the news cycle will continue to have significant effects on our subscription growth, we are increasing our control over the levers of our subscription model.”
On a call with analysts, Kopit Levien said the audience shrunk as readers pulled back from reading coverage of the pandemic to the same extent as in 2020.
“But as we saw last quarter, our average weekly audience was larger than in the same period in 2019 and every prior period,” she said, according to a FactSet transcript.
The company continues to view its audience as a potential market of at least 100 million people paying for English-language news, and that daily habits are “up for grabs.”
Compared with the second quarter of 2019 before the coronavirus pandemic, revenues were up 14.3%. For the third quarter, the company is expecting subscription revenues to climb 13% to 15%, and for ad revenues to rise about 30% to 35%.
Chief Financial Officer Roland Caputo said second-quarter digital ad revenue was ahead of the company’s own guidance due to demand from larger technology companies, as well as financial services advertisers, who spent heavily on targeted and audio products.
“Meanwhile, print advertising increased 48% as compared with 2020, primarily driven by growth in the luxury, media, technology and entertainment categories,” he told analysts. “Despite this impressive level of year-on-year growth, print advertising revenue lagged to 2019 by 33%.”
New York Times shares have fallen about 9% in the year to date, while the S&P 500
SPX,
has gained 17%.
