The Failing New York Times Crushes Earnings, Buoyed by Digital

They should send Trump a thank you card.

While traditional advertising is slumping and physical delivery of paper newspapers might be a relic, the company is killing it in digital, posted +51% increase in digital only products for the 4th quarter. It’s also important to note that digital advertising now represents 46% of total advertising revenues.

Total digital revenues were $600 million for 2017.

Reports Q4 (Dec) earnings of $0.39 per share, excluding non-recurring items, $0.10 better than the Capital IQ Consensus of $0.29; revenues rose 10.1% year/year to $484 mln vs the $467.3 mln two analyst estimate.

Subscription revenues increased 19.2% vs. high-teens guidance, while advertising revenues decreased 1.3% vs. guidance for a high single digit decline and other revenues increased 12.0%. Excluding the additional week, estimated total revenues increased 3.5%, with subscription revenues up 11.0% and advertising revenues down 6.6%. Subscription revenues in the fourth quarter of 2017 rose primarily due to significant growth in recent quarters in the number of subscriptions to the Company’s digital-only products. Revenue from the Company’s digital-only subscription products (which include our news product, as well as our Crossword and Cooking products) increased 51.2% compared with the fourth quarter of 2016, to $96.3 million. Digital-only subscriptions totaled approximately 2,644,000 at the end of the fourth quarter of 2017, a net increase of 157,000 subscriptions compared with the end of the third quarter of 2017 and a 41.8% increase compared with the end of the fourth quarter of 2016. Of the 157,000 additions, 99,000 came from the Company’s digital news products, while the remainder came from the Company’s Cooking and Crossword products. Fourth-quarter digital advertising revenue increased 8.5%, while print advertising revenue decreased 8.4%. Digital advertising revenue was $84.2 million, or 46.1% of total Company advertising revenues, compared with $77.6 million, or 41.9%, in the fourth quarter of 2016.

Q1 guidance: Total subscription revenues in the first quarter of 2018 are expected to increase in the mid to high-single digits compared to the first quarter of 2017. Total advertising revenues in the first quarter of 2018 are expected to decrease in the mid to high-single digits compared with the first quarter of 2017. Operating costs and adjusted operating costs are expected to increase in the low-single digits in the first quarter of 2018 compared with the first quarter of 2017.

“We’re pleased with the continued rate of growth and particularly pleased to be seeing strong retention from the large group of new subscribers who came to The Times late last year. We believe there remains a large opportunity to continue to extend our subscription reach and will continue to invest in areas of the business that will allow us to achieve that growth. “For the full year, we grew digital advertising revenue by double-digits and saw continued challenges in print advertising, though our rate of decline moderated somewhat in the late part of 2017. Advertising now represents just one-third of our total company revenues. “We finished the year with more than $600 million in digital revenues, putting us well on track toward our goal of $800 million and we accomplished that just two years into the five-year plan we laid out in our 2015 strategy document, Our Path Forward.”

Shares of NYT are higher by 82% over the past two years.

Failing never looked so good.