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NY Times (NYT) Q4 Earnings Top, Subscription Revenues Up Y/Y
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The New York Times Company (NYT - Free Report) posted fourth-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. Both print and digital advertising revenues showcased an increase from the year-ago period.
The company delivered adjusted earnings from continuing operations of 43 cents a share that beat the Zacks Consensus Estimate of 35 cents and improved 7.5% from the prior-year reported figure. Total revenues of $594.2 million surpassed the Zacks Consensus Estimate of $580.9 million and surged 16.7% year over year buoyed by robust digital subscription and advertising revenues.
The New York Times Company’s digital subscriber base has been increasing, and with the acquisition of The Athletic, it attained the goal of 10 million subscriptions well ahead of 2025. Management highlighted that it plans to promote a high-value New York Times bundled digital subscription and is aiming at least 15 million subscribers to The Times by the end of 2027. The company notified that from the first quarter of 2022 it will start reporting the number of unique subscribers, while continuing to report on individual subscription growth.
Subscription Revenues Rise
Subscription revenues improved 11.2% to $351.2 million primarily due to an increase in the number of subscriptions to the company’s digital-only products, which include News product, and Games, Cooking, Audm and Wirecutter, as well as a benefit from subscriptions graduating to higher prices from introductory promotional pricing. Revenues from digital-only products jumped 23.1% to $205.5 million. Print subscription revenues fell 2.1% to $145.7 million due to lower domestic home delivery revenues and lesser single-copy revenues.
The company ended the quarter with approximately 8,789,000 paid subscriptions across its print and digital products. It added 375,000 net new digital subscriptions compared with the end of the third quarter of 2021. Of the total subscription net additions, 171,000 came from the digital news product, while 204,000 came from other digital-only products.
Management envisions first-quarter 2022 total subscription revenues to increase about 9-11%, while digital-only subscription revenues are anticipated to surge approximately 18-21%. Including, The Athletic, total subscription revenues are expected to increase 11-15% and digital-only subscription revenues are projected to improve 23-28%.
Image Source: Zacks Investment Research
Advertising Revenues Grow
Total advertising revenues were $176.8 million in the reported quarter, up 26.9% year over year.
Print advertising revenues surged 33.6% to $65.6 million in the quarter under review. The metric increased mainly in the luxury and entertainment categories, which were significantly hurt in the year-ago period due to the pandemic.
Digital advertising revenues climbed 23.3% to $111.1 million. This year-over-year increase can primarily be attributed to higher direct-sold advertising, including traditional displays and podcasts.
The New York Times Company expects an increase of 16-20% in total advertising revenues and 18-22% in digital advertising revenues for the first quarter of 2022. Including, The Athletic, it guided a rise of 17-21% in total advertising revenues and 20-24% in digital advertising revenues.
Other Highlights
We note that other revenues grew 22.1% to $66.3 million during the quarter under review due to live events as well higher commercial printing and television series revenues. Management anticipates other revenues to jump approximately 15-20% in first-quarter 2022.
Adjusted operating costs rose 17.8% to $484.9 million during the quarter. Management anticipates adjusted operating costs to increase approximately 13-15% in first-quarter 2022, as the company continues to invest in the drivers of digital subscription growth. Including, The Athletic, adjusted operating costs are expected to increase 18-22%.
Total adjusted operating profit grew 12% to $109.3 million during the quarter under review. Higher subscription, advertising and other revenues more than offset the increase in adjusted operating costs.
Financial Aspects
The New York Times Company ended the quarter with cash and marketable securities of about $1.07 billion, reflecting an increase of $188 million from $882 million as of Dec 27, 2020. The company informed that subsequent to the fiscal year-end about $550 million was utilized to fund the buyout of The Athletic.
The company has a $250 million revolving line of credit through 2024. As of Dec 26, 2021, it had neither outstanding borrowings under the credit facility nor other outstanding debt obligations. The company incurred capital expenditures of about $9 million during the quarter. Management envisions capital expenditures of about $50 million in 2022.
The company’s board of directors declared a dividend of 9 cents a share. This reflects an increase of 2 cents from the preceding quarter. The dividend is payable on Apr 21, 2022, to shareholders of record as of the close of business on Apr 6, 2022. The board of directors authorized a $150 million share repurchase program that replaces an existing authorization under which approximately $16.2 million remained.
Wrapping Up
The New York Times Company has been diversifying business and adding new revenue streams. Its acquisition of Wordle, the popular daily word game, strengthens the game portfolio. The company has been keeping pace with the changing times by utilizing technological advancements to reach its target audience more effectively. The company’s business model with greater emphasis on subscription revenues bodes well.
We note that this Zacks Rank #5 (Strong Sell) stock has fallen 10.6% in the past six months compared with the industry’s decline of 9.3%.
Cirrus Logic, a leader in low-power, high-precision mixed-signal processing solutions, sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 16%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Cirrus Logic’s current financial year sales and EPS suggests growth of 25% and 23.8%, respectively, from the year-ago period. CRUS has an expected EPS growth rate of 10% for three-five years.
Fox Corporation, which operates as a news, sports, and entertainment company, carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 81.1%, on average.
The Zacks Consensus Estimate for Fox Corporation’s current financial year revenues suggests growth of 6.1% from the year-ago period. FOXA has an expected EPS growth rate of 8.8% for three-five years.
Vontier Corporation, a global industrial technology company focused on transportation and mobility solutions, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 10.3%, on average.
The Zacks Consensus Estimate for Vontier Corporation’s current financial year sales and EPS suggests growth of 11.4% and 15.4%, respectively, from the year-ago period. VNT has an expected EPS growth rate of 6.8% for three-five years.
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NY Times (NYT) Q4 Earnings Top, Subscription Revenues Up Y/Y
The New York Times Company (NYT - Free Report) posted fourth-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. Both print and digital advertising revenues showcased an increase from the year-ago period.
The company delivered adjusted earnings from continuing operations of 43 cents a share that beat the Zacks Consensus Estimate of 35 cents and improved 7.5% from the prior-year reported figure. Total revenues of $594.2 million surpassed the Zacks Consensus Estimate of $580.9 million and surged 16.7% year over year buoyed by robust digital subscription and advertising revenues.
The New York Times Company’s digital subscriber base has been increasing, and with the acquisition of The Athletic, it attained the goal of 10 million subscriptions well ahead of 2025. Management highlighted that it plans to promote a high-value New York Times bundled digital subscription and is aiming at least 15 million subscribers to The Times by the end of 2027. The company notified that from the first quarter of 2022 it will start reporting the number of unique subscribers, while continuing to report on individual subscription growth.
Subscription Revenues Rise
Subscription revenues improved 11.2% to $351.2 million primarily due to an increase in the number of subscriptions to the company’s digital-only products, which include News product, and Games, Cooking, Audm and Wirecutter, as well as a benefit from subscriptions graduating to higher prices from introductory promotional pricing. Revenues from digital-only products jumped 23.1% to $205.5 million. Print subscription revenues fell 2.1% to $145.7 million due to lower domestic home delivery revenues and lesser single-copy revenues.
The company ended the quarter with approximately 8,789,000 paid subscriptions across its print and digital products. It added 375,000 net new digital subscriptions compared with the end of the third quarter of 2021. Of the total subscription net additions, 171,000 came from the digital news product, while 204,000 came from other digital-only products.
Management envisions first-quarter 2022 total subscription revenues to increase about 9-11%, while digital-only subscription revenues are anticipated to surge approximately 18-21%. Including, The Athletic, total subscription revenues are expected to increase 11-15% and digital-only subscription revenues are projected to improve 23-28%.
Advertising Revenues Grow
Total advertising revenues were $176.8 million in the reported quarter, up 26.9% year over year.
Print advertising revenues surged 33.6% to $65.6 million in the quarter under review. The metric increased mainly in the luxury and entertainment categories, which were significantly hurt in the year-ago period due to the pandemic.
Digital advertising revenues climbed 23.3% to $111.1 million. This year-over-year increase can primarily be attributed to higher direct-sold advertising, including traditional displays and podcasts.
The New York Times Company expects an increase of 16-20% in total advertising revenues and 18-22% in digital advertising revenues for the first quarter of 2022. Including, The Athletic, it guided a rise of 17-21% in total advertising revenues and 20-24% in digital advertising revenues.
Other Highlights
We note that other revenues grew 22.1% to $66.3 million during the quarter under review due to live events as well higher commercial printing and television series revenues. Management anticipates other revenues to jump approximately 15-20% in first-quarter 2022.
Adjusted operating costs rose 17.8% to $484.9 million during the quarter. Management anticipates adjusted operating costs to increase approximately 13-15% in first-quarter 2022, as the company continues to invest in the drivers of digital subscription growth. Including, The Athletic, adjusted operating costs are expected to increase 18-22%.
Total adjusted operating profit grew 12% to $109.3 million during the quarter under review. Higher subscription, advertising and other revenues more than offset the increase in adjusted operating costs.
Financial Aspects
The New York Times Company ended the quarter with cash and marketable securities of about $1.07 billion, reflecting an increase of $188 million from $882 million as of Dec 27, 2020. The company informed that subsequent to the fiscal year-end about $550 million was utilized to fund the buyout of The Athletic.
The company has a $250 million revolving line of credit through 2024. As of Dec 26, 2021, it had neither outstanding borrowings under the credit facility nor other outstanding debt obligations. The company incurred capital expenditures of about $9 million during the quarter. Management envisions capital expenditures of about $50 million in 2022.
The company’s board of directors declared a dividend of 9 cents a share. This reflects an increase of 2 cents from the preceding quarter. The dividend is payable on Apr 21, 2022, to shareholders of record as of the close of business on Apr 6, 2022. The board of directors authorized a $150 million share repurchase program that replaces an existing authorization under which approximately $16.2 million remained.
Wrapping Up
The New York Times Company has been diversifying business and adding new revenue streams. Its acquisition of Wordle, the popular daily word game, strengthens the game portfolio. The company has been keeping pace with the changing times by utilizing technological advancements to reach its target audience more effectively. The company’s business model with greater emphasis on subscription revenues bodes well.
We note that this Zacks Rank #5 (Strong Sell) stock has fallen 10.6% in the past six months compared with the industry’s decline of 9.3%.
Pick These 3 Stocks
Here are three more favorably ranked stocks — Cirrus Logic (CRUS - Free Report) , Fox Corporation (FOXA - Free Report) and Vontier Corporation (VNT - Free Report) .
Cirrus Logic, a leader in low-power, high-precision mixed-signal processing solutions, sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 16%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Cirrus Logic’s current financial year sales and EPS suggests growth of 25% and 23.8%, respectively, from the year-ago period. CRUS has an expected EPS growth rate of 10% for three-five years.
Fox Corporation, which operates as a news, sports, and entertainment company, carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 81.1%, on average.
The Zacks Consensus Estimate for Fox Corporation’s current financial year revenues suggests growth of 6.1% from the year-ago period. FOXA has an expected EPS growth rate of 8.8% for three-five years.
Vontier Corporation, a global industrial technology company focused on transportation and mobility solutions, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 10.3%, on average.
The Zacks Consensus Estimate for Vontier Corporation’s current financial year sales and EPS suggests growth of 11.4% and 15.4%, respectively, from the year-ago period. VNT has an expected EPS growth rate of 6.8% for three-five years.