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Factors Influencing NY Times (NYT) This Earnings Season

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The New York Times Company (NYT - Free Report) is slated to report fourth-quarter 2017 results on Feb 8. In the trailing four quarters, it has outperformed the Zacks Consensus Estimate by an average of 49.2%. In the preceding quarter, this diversified media conglomerate delivered a positive earnings surprise of 44.4%. Therefore, investors are keeping their fingers crossed and hoping that the company surpasses earnings estimate even this time.

Analysts polled by Zacks expect fourth-quarter revenues to be $467 million, up more than 6% from the year-ago quarter. Meanwhile, the bottom line is anticipated to remain flat year over year. Being stable in the last 30 days, the Zacks Consensus Estimate for earnings is currently pegged at 30 cents.

Let’s delve deeper and find out the factors impacting the results.

Strategic Endeavors on Track

The New York Times Company has been realigning cost structure and streamlining operations to increase efficiencies. It has offloaded assets that bear no direct relation with the core operations in order to concentrate on online activities. The company is fast acclimatizing to the changing face of the multiplatform media universe, and has already included mobile and reader application products in its portfolio.

Furthermore, the company is concentrating on online activities as evident from its pay-and-read model. Notably, its pricing system for NYTimes.com was launched on Mar 28, 2011. The company notified that the number of paid digital subscribers reached 2,487,000 at the end of the third quarter of 2017 — rising 154,000 sequentially and 59.1% year over year.

Apart from gearing up to become an optimum destination for news and information, The New York Times Company is now focusing on service journalism with verticals like Cooking, Watching and Well. In this regard, it acquired The Wirecutter and its sister site — The Sweethome — that recommends people about technology gear, home products and other consumer services.

Ad Revenue a Concern

The U.S. newspaper publishing industry has been grappling with sinking advertising revenues. This downturn in the industry witnessed in the last few years aggravated with a fall in print readership as readers started opting for online news. Consequently, the print-advertising model became increasingly redundant.

The New York Times Company’s print advertising revenues fell 20.1% in the third quarter of 2017, following a decline of 10.5% in the preceding quarter. Total advertising revenues decreased 9% during the quarter under review. The company had earlier hinted that total advertising revenues in the final quarter are likely to decline in the high-single digits.

New York Times Company (The) Price, Consensus and EPS Surprise

 

New York Times Company (The) Price, Consensus and EPS Surprise | New York Times Company (The) Quote

What Does the Zacks Model Say?

Our proven model shows that The New York Times Company is likely to beat estimates this quarter. A stock needs to have both — a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The New York Times Company has an Earnings ESP of +1.70% and a Zacks Rank #2. This makes us reasonably confident of an earnings beat.

Other Stocks With Favorable Combination

Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:

World Wrestling Entertainment has an Earnings ESP of +2.56% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Activision Blizzard has an Earnings ESP of +4.99% and a Zacks Rank #3.

Discovery Communications has an Earnings ESP of +6.50% and a Zacks Rank of 3.

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