New York Times Digital-Only Subscription Revenue Expected to Increase


 
 
09:10 08/08/2018

The New York Times Company NYT  announced today second-quarter 2018 diluted earnings per share from continuing operations of $.14 compared with $.09 earnings per share in the same period of 2017. Adjusted diluted earnings per share from continuing operations (defined below) was $.17 in the second quarter of 2018 compared with $.17 in the second quarter of 2017.

Mark Thompson, president and chief executive officer, The New York Times Company NYT , said, “In the second quarter, we saw increases in revenue and overall profitability and continued growth in our digital subscription business. We added 109,000 net new digital-only subscriptions, of which 68,000 were to our core news bundle. At the end of Q2, we had 3.8 million total subscriptions, 2.9 million of which were digital-only. Our subscribers who came to us around the 2016 Election and post-Election periods continue to retain better than previous cohorts.

Operating profit rose to $40.0 million in the second quarter of 2018 from $26.5 million in the same period of 2017, principally driven by strong digital subscription and other revenues as well as lower operating costs, which were partially offset by lower advertising revenues. Adjusted operating profit (defined below) decreased to $59.4 million in the second quarter of 2018 compared with $64.7 million in the second quarter of 2017 as lower advertising revenues and higher marketing costs more than offset growth in both digital subscription and other revenues.

“Subscription revenues accounted for nearly two-thirds of the Company’s revenues, a trend we expect to continue. We continue to believe that there is significant runway to expand that base substantially.

“Turning to advertising, this was a subdued quarter for digital advertising as we predicted, but we remain confident that we will return to strong year-over-year growth in the third quarter.”, added Thompson.

In the first quarter of 2018, the NYT  adopted Accounting Standards Update 2017-07 Compensation— Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”). The Company has recast its second quarter and six months ended June 25, 2017 results to reflect the impact of the adoption of ASU 2017-07 for comparability purposes; there was no impact to net income as a result of the adoption.

Total revenues for the second quarter of 2018 increased 1.8 percent to $414.6 million from $407.1 million in the second quarter of 2017. Subscription revenues increased 4.2 percent, while advertising revenues decreased 9.9 percent and other revenues increased 40.0 percent.

Paid digital-only subscriptions totaled approximately 2,892,000 at the end of the second quarter of 2018, a net increase of 109,000 subscriptions compared with the end of the first quarter of 2018 and a 24.0 percent increase compared with the end of the second quarter of 2017. Of the 109,000 additions, 68,000 came from the Company’s digital news products, while the remainder came from the Company’s Cooking and Crossword products.

Total subscription revenues in the third quarter of 2018 are expected to increase in the mid-single digits compared with the third quarter of 2017, with digital-only subscription revenue expected to increase in the high-teens.

As of July 1, 2018, The New York Times NYT  had cash and marketable securities of $779.2 million (excluding restricted cash of $18.1 million, substantially all of which is set aside to collateralize certain workers’ compensation obligations). Included within marketable securities are approximately $68 million of securities used as collateral for letters of credit issued by the Company in connection with the leasing of floors in our headquarters building. Total debt and capital lease obligations were $251.9 million.

Other revenues in the third quarter of 2018 are expected to increase approximately 50 percent compared with the third quarter of 2017.

The New York Times Company (NYSE:NYT) NYT  is a global media organization dedicated to enhancing society by creating, collecting and distributing high-quality news and information. The Company includes The New York Times, NYTimes.com and related properties. It is known globally for excellence in its journalism, and innovation in its print and digital storytelling and its business model.


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