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Why Is New York Times (NYT) Down 3.2% Since Last Earnings Report?
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A month has gone by since the last earnings report for New York Times Co. (NYT - Free Report) . Shares have lost about 3.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is New York Times due for a breakout? 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 drivers.
NY Times Q1 Earnings Meet Estimates, Revenues Up Y/Y
The New York Times Company delivered first-quarter 2022 adjusted earnings from continuing operations of 19 cents a share that came in line with the Zacks Consensus Estimate but declined 26.9% from the prior-year reported figure. Total revenues of $537.4 million fell short of the Zacks Consensus Estimate of $543.3 million but increased 13.6% year over year.
Subscription revenues rose during the quarter. Both print and digital advertising revenues showcased an increase from the year-ago period. Notably, The New York Times Company is gradually heading toward its goal of 15 million subscribers by the end of 2027. The company’s recent buyouts of The Athletic and Wordle have helped it in expanding the addressable market and diversify offerings. To penetrate the market, management has introduced New York Times bundled digital subscription.
Subscription Revenues Rise
Subscription revenues rose 13% year over year to $372 million primarily due to an increase in the number of subscribers to the company’s digital-only products, benefit from subscriptions graduating to higher prices from introductory promotional pricing, and the inclusion of subscription revenues from The Athletic. Subscription revenues from digital-only products jumped 26.3% to $226.8 million. However, print subscription revenues fell 2.9% to $145.2 million due to lower domestic home delivery revenues and lesser single-copy revenues.
The company ended the quarter with roughly 9,108,000 total paid subscribers. Of this, 8,328,000 were paid digital-only subscribers and 780,000 were print subscribers. Total subscriptions at the end of the quarter were 10,390,000, comprising 9,620,000 digital-only subscriptions and 770,000 print subscriptions. As a result of The Athletic buyout, the company added approximately 1,101,000 subscribers and 1,233,000 subscriptions as of the date of acquisition.
There was a net increase of 387,000 digital-only subscribers and 382,000 digital-only subscriptions on a sequential basis and a net increase of 1,354,000 digital-only subscriptions year over year. These net increases included approximately 16,000 net subscriber and 24,000 net subscription additions to The Athletic since the acquisition on Feb 1.
For the quarter, digital-only subscriber ARPU $9.04 declined 1.2% year over year and 5.3% sequentially, both largely driven by the acquisition of The Athletic.
Management envisions second-quarter total subscription revenues to increase about 12-14%, while digital-only subscription revenues are anticipated to surge approximately 23-27%.
Advertising Revenues Increase
Total advertising revenues were $116.3 million in the reported quarter, up 19.7% year over year.
Print advertising revenues surged 30.9% to $49.3 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 12.6% to $67 million. This year-over-year increase can primarily be attributed to higher direct-sold advertising, including traditional displays and podcasts as well as the inclusion of advertising revenues from The Athletic.
For the second quarter, The New York Times Company expects low-single digit increase in digital advertising revenues and mid-single digit growth in total advertising revenues.
Other Highlights
We note that other revenues grew 5% year over year to $49.2 million during the quarter under review as a result of revenues from higher commercial printing and Wirecutter affiliate referral revenues.
Adjusted operating costs rose 17.7% to $476.5 million during the quarter. Management anticipates adjusted operating costs to increase approximately 18-22% in the second quarter.
Total adjusted operating profit declined 10.6% to $60.9 million during the quarter under review, as a result of operating losses at The Athletic.
Segment Details
The New York Times Group revenues increased 11% year over year to $525.3 million. Subscription revenues rose 9.9% to $361.6 million owing to growth in subscription revenues from digital-only products. Advertising revenues jumped 17.9% to $114.5 million due to growth in both print and digital advertising revenues. Adjusted operating profit fell 0.6% to $67.7 million as higher revenues were more than offset by higher costs.
Revenues totaled $12.2 million at The Athletic segment for the two months in the first quarter. Adjusted operating loss amounted $6.8 million for the period of the first quarter from Feb 1, 2022. The New York Times Company acquired The Athletic this January.
Management expects second-quarter total subscription revenues to increase 7-9% at The New York Times Group and foresees 4-6 percentage points contribution from The Athletic to consolidated results. It envisions total advertising revenues to increase 2-5% at The New York Times Group and anticipates 2-4 percentage points contribution from The Athletic.
Financial Aspects
The New York Times Company ended the first quarter with cash and marketable securities of about $474.8 million, reflecting a decrease of $599.6 million from $1.07 billion as of Dec 26, 2021. Approximately $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 Mar 27, 2022, it had neither outstanding borrowings under the credit facility nor other outstanding debt obligations. The company incurred capital expenditures of about $10 million during the quarter. Management envisions capital expenditures of about $55 million in 2022.
The board of directors authorized a $150 million share repurchase program in February 2022. Under this, the company repurchased shares worth $29 million in the first quarter. It had $121 million remained under the repurchase authorization.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 30.95% due to these changes.
VGM Scores
Currently, New York Times has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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. Notably, New York Times has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is New York Times (NYT) Down 3.2% Since Last Earnings Report?
A month has gone by since the last earnings report for New York Times Co. (NYT - Free Report) . Shares have lost about 3.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is New York Times due for a breakout? 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 drivers.
NY Times Q1 Earnings Meet Estimates, Revenues Up Y/Y
The New York Times Company delivered first-quarter 2022 adjusted earnings from continuing operations of 19 cents a share that came in line with the Zacks Consensus Estimate but declined 26.9% from the prior-year reported figure. Total revenues of $537.4 million fell short of the Zacks Consensus Estimate of $543.3 million but increased 13.6% year over year.
Subscription revenues rose during the quarter. Both print and digital advertising revenues showcased an increase from the year-ago period. Notably, The New York Times Company is gradually heading toward its goal of 15 million subscribers by the end of 2027. The company’s recent buyouts of The Athletic and Wordle have helped it in expanding the addressable market and diversify offerings. To penetrate the market, management has introduced New York Times bundled digital subscription.
Subscription Revenues Rise
Subscription revenues rose 13% year over year to $372 million primarily due to an increase in the number of subscribers to the company’s digital-only products, benefit from subscriptions graduating to higher prices from introductory promotional pricing, and the inclusion of subscription revenues from The Athletic. Subscription revenues from digital-only products jumped 26.3% to $226.8 million. However, print subscription revenues fell 2.9% to $145.2 million due to lower domestic home delivery revenues and lesser single-copy revenues.
The company ended the quarter with roughly 9,108,000 total paid subscribers. Of this, 8,328,000 were paid digital-only subscribers and 780,000 were print subscribers. Total subscriptions at the end of the quarter were 10,390,000, comprising 9,620,000 digital-only subscriptions and 770,000 print subscriptions. As a result of The Athletic buyout, the company added approximately 1,101,000 subscribers and 1,233,000 subscriptions as of the date of acquisition.
There was a net increase of 387,000 digital-only subscribers and 382,000 digital-only subscriptions on a sequential basis and a net increase of 1,354,000 digital-only subscriptions year over year. These net increases included approximately 16,000 net subscriber and 24,000 net subscription additions to The Athletic since the acquisition on Feb 1.
For the quarter, digital-only subscriber ARPU $9.04 declined 1.2% year over year and 5.3% sequentially, both largely driven by the acquisition of The Athletic.
Management envisions second-quarter total subscription revenues to increase about 12-14%, while digital-only subscription revenues are anticipated to surge approximately 23-27%.
Advertising Revenues Increase
Total advertising revenues were $116.3 million in the reported quarter, up 19.7% year over year.
Print advertising revenues surged 30.9% to $49.3 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 12.6% to $67 million. This year-over-year increase can primarily be attributed to higher direct-sold advertising, including traditional displays and podcasts as well as the inclusion of advertising revenues from The Athletic.
For the second quarter, The New York Times Company expects low-single digit increase in digital advertising revenues and mid-single digit growth in total advertising revenues.
Other Highlights
We note that other revenues grew 5% year over year to $49.2 million during the quarter under review as a result of revenues from higher commercial printing and Wirecutter affiliate referral revenues.
Adjusted operating costs rose 17.7% to $476.5 million during the quarter. Management anticipates adjusted operating costs to increase approximately 18-22% in the second quarter.
Total adjusted operating profit declined 10.6% to $60.9 million during the quarter under review, as a result of operating losses at The Athletic.
Segment Details
The New York Times Group revenues increased 11% year over year to $525.3 million. Subscription revenues rose 9.9% to $361.6 million owing to growth in subscription revenues from digital-only products. Advertising revenues jumped 17.9% to $114.5 million due to growth in both print and digital advertising revenues. Adjusted operating profit fell 0.6% to $67.7 million as higher revenues were more than offset by higher costs.
Revenues totaled $12.2 million at The Athletic segment for the two months in the first quarter. Adjusted operating loss amounted $6.8 million for the period of the first quarter from Feb 1, 2022. The New York Times Company acquired The Athletic this January.
Management expects second-quarter total subscription revenues to increase 7-9% at The New York Times Group and foresees 4-6 percentage points contribution from The Athletic to consolidated results. It envisions total advertising revenues to increase 2-5% at The New York Times Group and anticipates 2-4 percentage points contribution from The Athletic.
Financial Aspects
The New York Times Company ended the first quarter with cash and marketable securities of about $474.8 million, reflecting a decrease of $599.6 million from $1.07 billion as of Dec 26, 2021. Approximately $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 Mar 27, 2022, it had neither outstanding borrowings under the credit facility nor other outstanding debt obligations. The company incurred capital expenditures of about $10 million during the quarter. Management envisions capital expenditures of about $55 million in 2022.
The board of directors authorized a $150 million share repurchase program in February 2022. Under this, the company repurchased shares worth $29 million in the first quarter. It had $121 million remained under the repurchase authorization.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 30.95% due to these changes.
VGM Scores
Currently, New York Times has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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. Notably, New York Times has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.