New York Times Profit Tops Estimates on Digital Subscribersby
Publisher adds 51,000 online customers, most in three years
Advertising revenue falls as digital sales decline 5 percent
New York Times Co. posted third-quarter profit that topped analysts’ estimates after the publisher had its biggest increase in digital subscribers in almost three years.
Earnings excluding some items were 9 cents a share, the New York-based company said Thursday in a statement. That compares with the 6-cent average of estimates compiled by Bloomberg. Revenue rose about 1 percent to $367.4 million. Analysts had projected $364.7 million.
The publisher has been trying to attract more paying Web subscribers and increase online advertising inside videos and with marketing messages designed to resemble news stories. Earlier this month, the Times outlined a plan to double its digital revenue to $800 million by 2020 by increasing the number of paid online readers and drawing more young and international subscribers. The Times has joined other publishers in teaming up with Facebook Inc., Google Inc. and Apple Inc. to load stories more quickly on smartphones.
The company gained 51,000 digital subscribers, its biggest quarterly addition since the fourth quarter of 2012. On an earnings call Thursday, Times Co. Chief Executive Officer Mark Thompson said the spike in digital subscribers was partly due to discounted rates to students at the start of the school year.
Ad revenue fell 2.1 percent in the quarter, dragged down by digital ad sales that dropped 5 percent. Thompson attributed the decline to fewer repeating ad campaigns from technology and luxury companies and new industrywide standards that ensure advertisers only pay for impressions that have actually been viewed by readers.
In April, Thompson said the new standards would reduce the number of ads on the Times website, causing a short-term impact on revenue. The Times says digital advertising is expected to increase in the mid-single digits in the fourth quarter.
Thompson also said the Times is exploring technical solutions to address the threat from Internet users who block online ads using special software called “ad blockers.”
“Let me make it clear that we oppose ad blocking,” Thompson said. “The creation of quality news content is expensive and digital advertising is an important way in which we and other high-quality news providers fund news gathering operations.”
Print ad revenue fell 1 percent and circulation sales gained 1.1 percent.
Operating expenses declined 7.6 percent, partly helped by savings on outside printing costs and distribution.
The publisher reported net income of $9.42 million, or 6 cents a share, compared with a loss of $12.5 million, or 8 cents, a year earlier.
The Times also continues to invest in print. It introduced a redesigned New York Times Magazine in February and a monthly men’s style section in April to bolster print advertising, which still makes up a large part of revenue.
New York Times shares rose 1.8 percent to $13.29 at 1 p.m. in New York. Through Wednesday the stock had fallen 1.3 percent this year.