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Good News For The New York Times: Revenue Surges From Advertising And Subscription Gains

By News Creatives Authors , in Business , at August 4, 2021

Shares of the New York Times

NYT
Co. skyrocketed in early trading after the publisher reported better-than-expected quarterly earnings and gave a bullish outlook on its future results.

Net income at the New York-based company rose to $53.4 million, or 32 cents per share compared with $23.7 million, or 14 cents, a year earlier.  Revenue surged more than 23% to $498.4 million, buoyed by subscription and digital advertising gains.  Adjusted earnings were 36 cents.  On that basis, Wall Street analysts expected median per-share earnings of 27 cents on revenue of $488 million.

Advertising revenue in the quarter jumped 66% to $112.8 million, while subscription sales rose 16% to $339.2 million, its highest rate in more than a decade. The company added 142,000 net digital subscriptions, with 77,000 in News and 65,000 in Cooking and Games. The Times has more than 8 million paid subscribers for its digital and print products. Churn rates, which measure customers quitting a service, rose slightly internationally though remained unchanged domestically.

“We also believe that our increased focus on subscriber engagement, and on making them superior to registered and anonymous experiences, will help maintain healthy churn levels,” said New York Times Chief Executive Meredith Kopit Levien during the company’s earnings conference call. “And, we remain confident in our overarching approach to graduating subscribers from promotional prices to step-up and full prices.”

Like other media companies, the New York Times is squeezed by Internet platforms like Google

GOOG
and Facebook, which account for most online advertising spending. The Times is fairing better than rival publishers such as Gannett

GCI.I
and Tribune Publishing

TPCO
, which were recently sold.

According to Kopit Levien, who was named to her job last year, the Times has a potential addressable market of at least 100 millon people willing to pay for English-language journalism. The publisher is continuing to invest in its products to remain competitive in the marketplace.

“That includes investing thoughtfully in our news operation to cover the most important stories of our time and to meet more news needs,” she said. “It means investing in our adjacent products to meet a broader array of life needs, as we have done with Cooking and Games, each of which is now closing in on a million subscriptions. And it means investing to build the underlying tech, product experience, and company culture required for us to scale. “

Looking ahead, the New York Times expects digital subscription revenue to rise in 2021 at the same rate it did in 2019 when former President Donald Trump repeatedly and wrongly claimed the paper was failing. Total paid digital, and print subscriptions will reach 8.5 million this year, according to the company.

The Times forecast a 25 to 30% increase in digital subscription revenue for the current quarter ending in September, while digital ad sales are expected to post a 40% to 45% rise. Total subscription and advertising sales will rise 13 percent to 15 percent and 30 percent to 35 percent, respectively.

Shares of the Times recently traded at $47.40, about a 10% increase.  Wall Street analysts believe the stock has more room to run. The 52-week median target of Wall Street analysts on the Times is $56, indicating a potential upside of 19%.

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