New York Times Earnings Preview: What Are We Expecting?

October 31st, 2016 by Trefis Team
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The New York Times Company (NYSE:NYT) is scheduled to report its Q3 results on Wednesday, November 2. In the second quarter, the company’s circulation revenue increased by 3% year-over-year (y-o-y) on the back of growth in digital subscription revenues, increased home delivery prices and partially offset by declines in print copy sales. The total circulation revenue from digital-only subscriptions increased by 15% y-o-y, with 51,000 net paid digital-only subscriptions added to the news products in the second quarter compared to 33,000 in the same quarter last year. However, a challenging environment for advertising led to a fall in NYT’s advertising revenue (-12% y-o-y) due to declines in both the print and traditional digital segments.

In the upcoming third quarter results, NYT expects overall growth in circulation revenues to be likely driven by continued growth in digital subscription revenues. NYT expects an addition of 55k to 60k net digital-only subscriptions, which are now reported under circulation revenues. Meanwhile, the company expects the downtrend in advertising to continue in the third quarter of 2016, with revenues falling in the range of 5-7% y-o-y. However, the digital advertising segment will likely show strength based on higher engagement of the company on branded content, smartphones, programmatic video, VR and other new forms of storytelling.

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Interestingly, NYT acquired The Wirecutter (an online consumer guide) and The Sweethome (home-product review site) for more than $30 million this week. These sites make their money through affiliate links, and generate revenue when consumers click on them and make purchases via e-commerce sites. Since the media company is already witnessing decline in its traditional web displays, this could add revenues to NYT’s digital advertising segment going forward.

Have more questions? Please refer to our complete analysis for New York Times 

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