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NY Times (NYT) Q2 Earnings Top, Subscription Revenues Rise
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The New York Times Company (NYT - Free Report) posted second-quarter 2021 results, wherein both the top and the bottom lines not only surpassed the Zacks Consensus Estimate but also improved year over year. Subscription revenues rose during the quarter. Moreover, both print and digital advertising revenues showcased an increase from the year-ago period. Management anticipates growth in total advertising revenues in the third quarter.
The company delivered adjusted earnings from continuing operations of 36 cents a share that beat the Zacks Consensus Estimate of 27 cents and surged from 18 cents reported in the year-ago period. Total revenues of $498.5 million surpassed the Zacks Consensus Estimate of $489.8 million and improved 23.5% on a year-over-year basis.
We note that this Zacks Rank #3 (Hold) stock has fallen 14.7% in the past six months compared with the industry’s decline of 13.1%.
Subscription Revenues Rise
Subscription revenues improved 15.7% to $339.2 million primarily due to increase in the number of subscriptions to the company’s digital-only products, which include news product, and Games, Cooking and Audm products, as well as a benefit from subscriptions graduating to higher prices from introductory promotional pricing. Revenues from digital-only products jumped 30.3% to $190.1 million. Print subscription revenues rose 1.3% to $149.1 million, attributable to higher domestic home delivery revenues.
The company ended the quarter with approximately 7,936,000 subscriptions across its print and digital products. Management notified that the number of paid digital-only subscribers reached roughly 7,133,000 at the end of the quarter — rising 142,000 sequentially and 1,463,000 year over year. Of the 142,000 total net additions, 77,000 came from the digital news product, while remaining came from Cooking, Games and Audm products.
Meredith Kopit Levien, president and CEO said, “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.”
Management projects third-quarter 2021 total subscription revenues to increase about 13-15%, while digital-only subscription revenues anticipated to surge approximately 25-30%.
The New York Times Company Price, Consensus and EPS Surprise
Total advertising revenues were $112.8 million in the reported quarter, up 66.4% year over year. In the third quarter, total advertising revenues are projected to increase approximately 30-35%.
Print advertising revenues surged 48% to $41.8 million in the quarter under review. The metric increased, mainly in the luxury, media and technology categories, as a result of the impact of the comparison to soft print advertising revenues in the year-ago period owing to lower advertiser spending during the onset of the pandemic.
Digital advertising revenues soared 79.6% to $71 million. This year-over-year increase can primarily be attributed to higher direct-sold advertising, including traditional display and podcasts, as well as the impact of the comparison to soft digital advertising revenues in the prior-year pandemic-hit quarter. Management expects digital advertising revenues to increase roughly 40-45% in the third quarter.
Other Highlights
We note that other revenues grew 8.7% to $46.5 million during the quarter under review due to higher Wirecutter affiliate referral revenues. Management anticipates other revenues to jump approximately 5% in the third quarter.
Adjusted operating costs rose 15.4% to $405.6 million during the quarter. Management anticipates adjusted operating costs to increase approximately 18-20% in the third quarter, as the company continues to invest in the drivers of digital subscription growth. Total adjusted operating profit grew 78.2% to $92.9 million during the quarter under review.
Financial Aspects
The New York Times Company ended the quarter with cash and marketable securities of about $946.6 million. The company has a $250 million revolving line of credit through 2024. As of Jun 27, 2021, the company had neither outstanding borrowings under the credit facility nor other outstanding debt obligations. It incurred capital expenditures of about $8 million during the quarter. Management envisions capital expenditures of about $50 million in 2021.
Wrapping Up
The New York Times Company has been diversifying business, adding new revenue streams, realigning cost structure and streamlining operations to increase efficiencies. This New York-based company has been keeping pace with the changing times by utilizing technological advancements to reach their target audience more effectively. Notably, the company’s business model with greater emphasis on subscription revenues bodes well.
Entravision Communications Corporation (EVC - Free Report) , which carries a Zacks Rank #2, has a trailing four-quarter earnings surprise of 71.7%, on average.
Shaw Communications Inc. , which carries a Zacks Rank #2, has a trailing four-quarter earnings surprise of 32.7%, on average.
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NY Times (NYT) Q2 Earnings Top, Subscription Revenues Rise
The New York Times Company (NYT - Free Report) posted second-quarter 2021 results, wherein both the top and the bottom lines not only surpassed the Zacks Consensus Estimate but also improved year over year. Subscription revenues rose during the quarter. Moreover, both print and digital advertising revenues showcased an increase from the year-ago period. Management anticipates growth in total advertising revenues in the third quarter.
The company delivered adjusted earnings from continuing operations of 36 cents a share that beat the Zacks Consensus Estimate of 27 cents and surged from 18 cents reported in the year-ago period. Total revenues of $498.5 million surpassed the Zacks Consensus Estimate of $489.8 million and improved 23.5% on a year-over-year basis.
We note that this Zacks Rank #3 (Hold) stock has fallen 14.7% in the past six months compared with the industry’s decline of 13.1%.
Subscription Revenues Rise
Subscription revenues improved 15.7% to $339.2 million primarily due to increase in the number of subscriptions to the company’s digital-only products, which include news product, and Games, Cooking and Audm products, as well as a benefit from subscriptions graduating to higher prices from introductory promotional pricing. Revenues from digital-only products jumped 30.3% to $190.1 million. Print subscription revenues rose 1.3% to $149.1 million, attributable to higher domestic home delivery revenues.
The company ended the quarter with approximately 7,936,000 subscriptions across its print and digital products. Management notified that the number of paid digital-only subscribers reached roughly 7,133,000 at the end of the quarter — rising 142,000 sequentially and 1,463,000 year over year. Of the 142,000 total net additions, 77,000 came from the digital news product, while remaining came from Cooking, Games and Audm products.
Meredith Kopit Levien, president and CEO said, “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.”
Management projects third-quarter 2021 total subscription revenues to increase about 13-15%, while digital-only subscription revenues anticipated to surge approximately 25-30%.
The New York Times Company Price, Consensus and EPS Surprise
The New York Times Company price-consensus-eps-surprise-chart | The New York Times Company Quote
Advertising Revenues Grow
Total advertising revenues were $112.8 million in the reported quarter, up 66.4% year over year. In the third quarter, total advertising revenues are projected to increase approximately 30-35%.
Print advertising revenues surged 48% to $41.8 million in the quarter under review. The metric increased, mainly in the luxury, media and technology categories, as a result of the impact of the comparison to soft print advertising revenues in the year-ago period owing to lower advertiser spending during the onset of the pandemic.
Digital advertising revenues soared 79.6% to $71 million. This year-over-year increase can primarily be attributed to higher direct-sold advertising, including traditional display and podcasts, as well as the impact of the comparison to soft digital advertising revenues in the prior-year pandemic-hit quarter. Management expects digital advertising revenues to increase roughly 40-45% in the third quarter.
Other Highlights
We note that other revenues grew 8.7% to $46.5 million during the quarter under review due to higher Wirecutter affiliate referral revenues. Management anticipates other revenues to jump approximately 5% in the third quarter.
Adjusted operating costs rose 15.4% to $405.6 million during the quarter. Management anticipates adjusted operating costs to increase approximately 18-20% in the third quarter, as the company continues to invest in the drivers of digital subscription growth. Total adjusted operating profit grew 78.2% to $92.9 million during the quarter under review.
Financial Aspects
The New York Times Company ended the quarter with cash and marketable securities of about $946.6 million. The company has a $250 million revolving line of credit through 2024. As of Jun 27, 2021, the company had neither outstanding borrowings under the credit facility nor other outstanding debt obligations. It incurred capital expenditures of about $8 million during the quarter. Management envisions capital expenditures of about $50 million in 2021.
Wrapping Up
The New York Times Company has been diversifying business, adding new revenue streams, realigning cost structure and streamlining operations to increase efficiencies. This New York-based company has been keeping pace with the changing times by utilizing technological advancements to reach their target audience more effectively. Notably, the company’s business model with greater emphasis on subscription revenues bodes well.
Key Picks
Nexstar Media Group, Inc. (NXST - Free Report) carries a Zacks Rank #2 (Buy). The company has an estimated long-term earnings growth rate of 10%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Entravision Communications Corporation (EVC - Free Report) , which carries a Zacks Rank #2, has a trailing four-quarter earnings surprise of 71.7%, on average.
Shaw Communications Inc. , which carries a Zacks Rank #2, has a trailing four-quarter earnings surprise of 32.7%, on average.