Back to top

Image: Bigstock

The New York Times Company to Post Q1 Earnings: Drivers to Note

Read MoreHide Full Article

The New York Times Company (NYT - Free Report) is set to announce its first-quarter 2025 earnings on May 7, before the market opens. Key focus areas include subscription growth and trends in advertising revenues.

The Zacks Consensus Estimate for first-quarter revenues is pegged at $635.1 million, indicating a 6.9% rise from the prior-year period.

This diversified media conglomerate is also expected to show improvement in the bottom line. The consensus estimate for earnings per share has remained steady at 35 cents over the past 30 days, suggesting a 12.9% increase from the year-ago period.

With a four-quarter trailing average earnings surprise of 25%, NYT has consistently outperformed expectations. In the last reported quarter, the company surpassed the Zacks Consensus Estimate for EPS by 8.1%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Factors Shaping The New York Times Company’s Q1 Outcome

The New York Times Company's emphasis on subscription growth and digital innovation has played an instrumental role in its progress. By continually enhancing its suite of digital offerings, spanning news, games, cooking and sports content, the company has successfully attracted new subscribers while retaining existing ones. This focused approach has helped optimize average revenue per user. In addition, effective content monetization and disciplined cost management are likely to have supported profitability.

On its last earnings call, management projected a 7-10% year-over-year increase in total subscription revenues for the first quarter, with digital-only subscription revenues anticipated to rise 14-17%. Currently, the Zacks Consensus Estimate for subscription revenues is pegged at $466.6 million, implying 8.8% growth, while digital-only subscription revenues are estimated at $338.9 million, suggesting a 15.7% increase.

The New York Times Company's expanding subscriber base is central to its growth strategy. The consensus estimate indicates that the digital-only subscriber count is likely to reach 11.1 million by the end of the first quarter of 2025. This growth solidifies its influence and market standing, positioning it as an attractive platform for advertisers seeking an engaged audience. 

In line with this, The New York Times Company has made significant strides in reducing dependence on traditional advertising by focusing on digital avenues. Management anticipates high-single-digit growth in digital advertising revenues. The Zacks Consensus Estimate for digital advertising revenues stands at $68.8 million, indicating a 9.1% increase.

Despite these positive trends, the company continues to face some challenges. Print subscription and advertising revenues are likely to have declined year over year, reflecting the ongoing shift toward digital consumption. The consensus estimate pegs print subscription revenues at $127.6 million, down 6.2%, while print advertising revenues are expected to fall 13.4% to $35.2 million. Additionally, higher spending on product development, marketing and administrative functions may have weighed on margins. Management had earlier guided for adjusted operating costs to increase 5-6% in the quarter under review.

The New York Times Company Price, Consensus and EPS Surprise

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

What the Zacks Model Predicts for NYT

Our proven model does not conclusively predict an earnings beat for The New York Times Company this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here. 

The New York Times Company has a Zacks Rank #3 but an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

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

BILL Holdings (BILL - Free Report) has an Earnings ESP of +0.30% and carries a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
 
It is set to report third-quarter fiscal 2025 results on May 8. The Zacks Consensus Estimate for BILL Holdings’ third-quarter earnings is pegged at 37 cents per share and has remained unchanged over the past 30 days. The consensus mark indicates a year-over-year decline of 38.3%. 
 
Fortinet (FTNT - Free Report) is set to report first-quarter 2025 results on May 7. It has an Earnings ESP of +3.77% and carries a Zacks Rank #3 at present.
 
The Zacks Consensus Estimate for Fortinet’s first-quarter earnings per share is pegged at 53 cents, unchanged over the past 30 days, and indicates year-over-year growth of 23.3%. 
 
Advanced Micro Devices (AMD - Free Report) is set to report first-quarter 2025 results on May 6. It has an Earnings ESP of +0.74% and carries a Zacks Rank #3 at present.
 
The Zacks Consensus Estimate for Advanced Micro Devices’ first-quarter earnings is pegged at 93 cents per share, unchanged over the past 30 days, calling for an increase of 50% from the year-ago quarter’s reported figure.

Published in