New York Times profit beats as digital ad sales rise

Net income rose to about US$16.4 million, or 10 cents a share, from US$9.2 million, or 6 cents, a year earlier.

“It puts us in a unique position among global news providers”, says Mark Thompson, president and CEO of The New York Times Company.

Wall Street expected 11 cents a diluted share on revenue of $383.5 million.

Additionally, analysts at Jefferies raised its 2015 and 2016 earnings estimates to $0.56 from $0.53 per share.

Circulation revenues for the quarter grew 0.9 percent to $211.66 million, and other revenue increased 4.5 percent to $22.63 million from past year.

Web and tablet access sell for $5 per week and the all digital access subscription is $8.75.

“New York Times benefited by lapping marketing spending related to digital initiatives in fiscal year 2014, as well as the continued extraction of efficiencies from print distribution”, Jefferies analysts said.

New York Times (NYSE:NYT) traded down 2.96% during trading on Thursday, reaching $12.80.

Unsurprisingly however its print ad revenue fell by 12.8 per cent which overwhelmed the digital gains resulting in an overall advertising drop of 5.5 per cent. This is the fourth consecutive quarter of double-digit growth in digital advertising revenue, indicating that the company’s content is generating momentum with ad buyers.

Looking ahead to the third quarter, the company expects total circulation revenues to increase at a rate similar to the second quarter, while total advertising revenues are projected to decline in the mid-single digits from previous year.

But it wasn’t all bad news, as the company’s digital subscription base continued to grow, fueling a rise in circulation revenues.

The Times recently joined other publishers in partnering with Facebook Inc. and Apple Inc to post stories directly to the tech companies’ news feeds.

The company noted that its digital growth came despite its decision to make its NYT Now mobile app, launched last year, free after the paid version failed to garner the expected number of subscribers.

“Expense management will remain a top priority as we head into the second half of 2015, although our emphasis on digital investment and execution is also more intense than ever”. On a different note, The Company has disclosed insider buying and selling activities to the Securities Exchange, The Securities and Exchange Commission has divulged that Golden Michael, director officer (Vice Chairman) of New York Times Co, had unloaded 76,667 shares at an average price of $14.14 in a transaction dated on May 27, 2015.