We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
New York Times Company (NYT) Up 7.8% Since Earnings Report: Can It Continue?
Read MoreHide Full Article
It has been about a month since the last earnings report for New York Times Company (The) (NYT - Free Report) . Shares have added about 7.8% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
NY Times Earnings Beat Estimates in Q4, Fall Y-o-Y
The New York Times Company posted second straight quarter of positive earnings surprise, when it reported fourth-quarter 2016 results. The company delivered adjusted earnings from continuing operations of $0.30 per share that came ahead of the Zacks Consensus Estimate of $0.23 but declined 18.9% from the year-ago quarter.
In the reported quarter, The New York Times Company registered an increase in the number of digital subscribers and a rise in circulation revenue. The quarter also witnessed a decline in print advertising revenue but an increase in digital advertising revenue. Adjusted operating costs came in at $344 million during the quarter, up 5.2% year over year. Management now expects adjusted operating costs to increase in the mid to high-single digits in the first quarter of 2017.
The New York Times Company’s total revenue of $439.7 million came ahead of the Zacks Consensus Estimate of $437 million but decreased 1.1% year over year.
Circulation revenue grew 5% to $226 million, primarily backed by the company’s digital subscription initiatives and a rise in the home delivery price of The New York Times in 2016. Circulation revenue from digital-only subscription jumped 21.9% to $63.7 million. Circulation revenue from digital-only subscriptions to news products rose 21.2% to $61.1 million. Management now projects total circulation revenue in the first quarter of 2017 to increase at a rate of 6%.
Total advertising revenue came in at $185 million in the reported quarter, down 9.7% year over year. We observe that the rate of decline increased from 7.7% witnessed in the preceding quarter. Advertising revenue declined 8% in October, 7% in November and 15% in December. Print advertising revenue fell 20.4% in the fourth quarter, following a decline of 18.5% in the previous quarter.
Digital advertising revenue surged 10.9% to $77.6 million, after witnessing an increase of 21.4% in the preceding quarter. Higher digital advertising revenue came on the back of rise in revenue from mobile platform, programmatic buying channels and branded content, partly offset by a fall in traditional website display advertising.
The company saw an 11.6% drop in the display advertising category and a 17.4% fall in the classified advertising category. The diversified media conglomerate hinted that total advertising revenue in the first quarter of 2017 is likely to decline in the high-single digits with digital advertising expected to increase between 10% and 15%.
Total adjusted operating profit plunged 18.7% to $95.7 million on account of a fall in print advertising revenue and higher costs, partly offset by rise in circulation revenue.
Other Financial Aspects
The New York Times Company ended the quarter with cash and marketable securities of about $737.5 million, and total debt and capital lease obligations of approximately $247 million. The company incurred capital expenditures of about $9 million during the quarter. In December, the company utilized approximately $189 million in cash to retire a debt.
Management expects to incur capital expenditures of about $85 million to $90 million in 2017.
Conclusion
Advertising, which remains a significant source of revenue, is largely dependent on the global financial health. Softness in advertising demand has been weighing on The New York Times Company’s performance. Consequently, the company is trying every means to shield itself from the impact of an unstable market and contemplating on new avenues of revenue generation. The company had offloaded assets that bear no direct relation to its core operations in order to re-focus on its core newspapers and pay more attention to online activities.
The New York Times Company has been adding diverse revenue streams, such as a pay-and-read model, to stay less vulnerable to economic conditions. The company is also adapting to the changing face of the multiplatform media universe, and has already included mobile and reader application products in its portfolio.
Despite hiccups in the economy, what still promises revenue generation is The New York Times Company’s pricing system for NYTimes.com, which was launched on Mar 28, 2011. The company notified that the number of paid digital subscribers reached 1,853,000 at the end of the reported quarter – rising 296,000 sequentially (276,000 came from the digital news products and 20,000 from the Crossword product) and 45.9% year over year.
The New York Times Company remains committed to streamline its cost structure, strengthen its balance sheet, and rebalance its portfolio.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted 25% downward due to these changes.
At this time, New York Times Company's stock has a nice Growth Score of 'B', however its Momentum is doing a bit better with an 'A'. However, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
New York Times Company (NYT) Up 7.8% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for New York Times Company (The) (NYT - Free Report) . Shares have added about 7.8% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
NY Times Earnings Beat Estimates in Q4, Fall Y-o-Y
The New York Times Company posted second straight quarter of positive earnings surprise, when it reported fourth-quarter 2016 results. The company delivered adjusted earnings from continuing operations of $0.30 per share that came ahead of the Zacks Consensus Estimate of $0.23 but declined 18.9% from the year-ago quarter.
In the reported quarter, The New York Times Company registered an increase in the number of digital subscribers and a rise in circulation revenue. The quarter also witnessed a decline in print advertising revenue but an increase in digital advertising revenue. Adjusted operating costs came in at $344 million during the quarter, up 5.2% year over year. Management now expects adjusted operating costs to increase in the mid to high-single digits in the first quarter of 2017.
The New York Times Company’s total revenue of $439.7 million came ahead of the Zacks Consensus Estimate of $437 million but decreased 1.1% year over year.
Circulation revenue grew 5% to $226 million, primarily backed by the company’s digital subscription initiatives and a rise in the home delivery price of The New York Times in 2016. Circulation revenue from digital-only subscription jumped 21.9% to $63.7 million. Circulation revenue from digital-only subscriptions to news products rose 21.2% to $61.1 million. Management now projects total circulation revenue in the first quarter of 2017 to increase at a rate of 6%.
Total advertising revenue came in at $185 million in the reported quarter, down 9.7% year over year. We observe that the rate of decline increased from 7.7% witnessed in the preceding quarter. Advertising revenue declined 8% in October, 7% in November and 15% in December. Print advertising revenue fell 20.4% in the fourth quarter, following a decline of 18.5% in the previous quarter.
Digital advertising revenue surged 10.9% to $77.6 million, after witnessing an increase of 21.4% in the preceding quarter. Higher digital advertising revenue came on the back of rise in revenue from mobile platform, programmatic buying channels and branded content, partly offset by a fall in traditional website display advertising.
The company saw an 11.6% drop in the display advertising category and a 17.4% fall in the classified advertising category. The diversified media conglomerate hinted that total advertising revenue in the first quarter of 2017 is likely to decline in the high-single digits with digital advertising expected to increase between 10% and 15%.
Total adjusted operating profit plunged 18.7% to $95.7 million on account of a fall in print advertising revenue and higher costs, partly offset by rise in circulation revenue.
Other Financial Aspects
The New York Times Company ended the quarter with cash and marketable securities of about $737.5 million, and total debt and capital lease obligations of approximately $247 million. The company incurred capital expenditures of about $9 million during the quarter. In December, the company utilized approximately $189 million in cash to retire a debt.
Management expects to incur capital expenditures of about $85 million to $90 million in 2017.
Conclusion
Advertising, which remains a significant source of revenue, is largely dependent on the global financial health. Softness in advertising demand has been weighing on The New York Times Company’s performance. Consequently, the company is trying every means to shield itself from the impact of an unstable market and contemplating on new avenues of revenue generation. The company had offloaded assets that bear no direct relation to its core operations in order to re-focus on its core newspapers and pay more attention to online activities.
The New York Times Company has been adding diverse revenue streams, such as a pay-and-read model, to stay less vulnerable to economic conditions. The company is also adapting to the changing face of the multiplatform media universe, and has already included mobile and reader application products in its portfolio.
Despite hiccups in the economy, what still promises revenue generation is The New York Times Company’s pricing system for NYTimes.com, which was launched on Mar 28, 2011. The company notified that the number of paid digital subscribers reached 1,853,000 at the end of the reported quarter – rising 296,000 sequentially (276,000 came from the digital news products and 20,000 from the Crossword product) and 45.9% year over year.
The New York Times Company remains committed to streamline its cost structure, strengthen its balance sheet, and rebalance its portfolio.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted 25% downward due to these changes.
New York Times Company (The) Price and Consensus
New York Times Company (The) Price and Consensus | New York Times Company (The) Quote
VGM Scores
At this time, New York Times Company's stock has a nice Growth Score of 'B', however its Momentum is doing a bit better with an 'A'. However, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.