Yahoo Finance Why Is New York Times (NYT) Up 6.1% Since Last Earnings Report?
A month has gone by since the last earnings report for New York Times Co. (NYT). Shares have added about 6.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is New York Times due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
NY Times Q1 Earnings Beat Estimates, Revenues Increase Y/Y
The New York Times Company continued with its decent performance in the first quarter of 2024. The company's adjusted earnings per share came in at 31 cents, which surpassed the Zacks Consensus Estimate of 18 cents. The figure marked a substantial increase from the year-ago adjusted earnings of 19 cents a share. Total revenues of $594 million came ahead of the Zacks Consensus Estimate of $591 million and increased 5.9% year over year.
The New York Times Company added approximately 210,000 net digital-only subscribers compared with the end of the preceding quarter, propelled by bundle and multi-product subscriber additions.
Furthermore, The New York Times Company achieved consistent growth in its digital-only average revenue per user (“ARPU”). The ARPU increased to an impressive $9.21 in the first quarter from $9.04 in the year-ago period. This increase in ARPU can be attributed to subscribers transitioning from promotional pricing to higher rate plans and price hikes for tenured non-bundle subscribers.
Subscription Revenues Rise
Subscription revenues of $429 million grew 7.9% year over year. Subscription revenues from digital-only products jumped 13.2% to $293 million. This reflects an increase in bundle and multiproduct revenues and a rise in other single-product subscription revenues, partly offset by a decline in news-only subscription revenues. Print subscription revenues dropped 2% to $136 million due to a decrease in domestic home-delivery revenues.
The company ended the quarter with roughly 10.55 million subscribers across its print and digital products, including roughly 9.91 million digital-only subscribers. Of the 9.91 million subscribers, about 4.55 million were bundle and multiproduct subscribers. Management envisions second-quarter 2024 total subscription revenues to increase about 6-8%, with digital-only subscription revenues anticipated to rise approximately 11-14%.
A Look at Advertising Revenues
Total advertising revenues of $103.7 million declined 2.4% from the prior-year period. Digital advertising revenues increased 2.9% to $63 million. This can be attributed to higher revenues from display advertising at The Athletic and creative services, partly offset by lower revenues from display advertising at The New York Times Group and podcast advertising. Meanwhile, print advertising revenues fell 9.5% to $40.7 million in the quarter under review. The metric decreased mainly in the media and entertainment and technology categories.
For the second quarter of 2024, the company foresees a low-single-digit increase in total advertising revenues. It envisions a high-single-digit jump in digital advertising revenues.
Other Highlights
We note that other revenues jumped 7.6% year over year to $61.3 million during the quarter under review due to higher licensing and Wirecutter affiliate referral revenues, partly offset by lower books, television and film revenues. Adjusted operating costs rose 2.2% to $518 million during the quarter. Management anticipates adjusted operating costs to be flat to up low-single-digits in the second quarter of 2024. The total adjusted operating profit increased 40.9% to $76.1 million during the quarter under review, while the adjusted operating margin expanded 320 basis points to 12.8%.
Segment Details
The New York Times Group’s revenues increased 4.6% year over year to $557.4 million. Subscription revenues rose 7.3% to $401.4 million due to growth in subscription revenues from digital-only products, partly offset by a decline in print subscription revenues. Advertising revenues dropped 4% to $98 million due to declines in print advertising revenues.
Revenues totaled $37.2 million in The Athletic segment, up 33% year over year. Subscription revenues rose to $27.6 million from $23.4 million in the first quarter of 2023, mainly due to an increase in subscribers with The Athletic. Advertising revenues jumped to $5.7 million from $4.2 million in the first quarter of 2023, principally due to higher revenues from display advertising.
Financial Aspects
The New York Times Company ended the quarter with cash and marketable securities of about $686.3 million, reflecting a decrease of $22.9 million from $709.2 million as of Dec 31, 2023. The company incurred capital expenditures of about $7 million during the quarter. Management envisions capital expenditures of about $40 million in 2024. During the quarter, the company repurchased 703,468 shares of its Class A common stock for an aggregate amount of approximately $32.4 million. As of May 3, 2024, about $213 million remains available and authorized for further repurchases.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, New York Times has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise New York Times has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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The New York Times Company (NYT) : Free Stock Analysis Report
