The New York Times Company
(
NYT
), the publisher of
The New York Times
, the
International Herald Tribune
and
The Boston Globe
, is scheduled to report its first-quarter 2012 financial results
on Thursday, April 19, 2012.
The current Zacks Consensus Estimate for the quarter is 2 cents
a share, which is in line with the prior-year quarter's earnings.
The estimates in the current Zacks Consensus range between a low of
1 cent and a high of 3 cents a share. The Zacks Consensus estimates
revenue at $499 million for the first quarter.
Recap of Fourth-Quarter 2011
On February 2, 2012, The New York Times Company delivered
fourth-quarter 2011 results. The quarterly earnings of 45 cents a
share beat the Zacks Consensus Estimate of 42 cents, but dropped
2.2% from 46 cents earned in the prior-year quarter.
The quarter reflected favorable response to the digital
subscription packages, increase in digital advertising revenue at
News Media Group, improvement in circulation revenue and fall in
attrition rate as subscribers to the
New York Times
' print version were able to access content or articles online as
well as on all applications of The Times for no additional charge.
However, these failed to offset the waning print advertising.
The New York Times Company's top line continues to fall. After
declining 3.1% in the third quarter, total revenue slipped 2.8% to
$643 million in the quarter, and also fell short of the Zacks
Consensus Estimate of $647 million.
(Refer the article:
NY Times Beats, Profit Drops
)
Zacks Agreement & Magnitude
The Zacks Consensus Estimate for the first quarter hasn't shown
any movement in the last 30 days, as the upward and downward
revisions made by analysts neutralized the impact. Of the 6
analysts following the stock, one revised the estimate upward and
another analyst lowered the same in the last 30 days. In the last 7
days too, the Zacks Consensus Estimate remained constant, since an
upward revision in the estimate made by 1 analyst did not have any
substantial impact. None of the analysts trimmed their estimates in
the last 7 days.
Mixed Earnings Surprise History
With respect to earnings surprises, The New York Times
Companyhas missed as well as topped the Zacks Consensus Estimate
over the last four quarters in the range of negative 33.3% to
positive 66.7%. The average remained at positive 15.1%. This
suggests that The New York Times Companyhas beaten the Zacks
Consensus Estimate by an average of 15.1% in the trailing four
quarters.
Our Take
The company's advertising volume came under pressure as
advertisers shied away from making any upfront commitments, in an
economy which has not yet fully recovered.
The publishing industry has long been grappling with sinking
advertising revenue. This comes in the wake of a longer-term
secular decline as more readers choose free online news, thereby
making the print-advertising model increasingly irrelevant. To curb
shrinking advertising revenue and seeking new revenue avenues, the
publishing companies contemplated charging readers for online
content.
Despite hiccups in the economy, what still promises a guaranteed
revenue generation avenue is The New York Times Company's pricing
system for NYTimes.com, which was launched on March 28, 2011.
Another media conglomerate,
News Corporation
(
NWSA
) has also moved towards an online subscription-based model for its
general news content. News International, a subsidiary of News
Corporation, began charging readers for online content of The Times
of London and Sunday Times of London effective June 2010.
The New York Times Company remains committed to streamlining its
cost structure, strengthening its balance sheet and rebalancing its
portfolio. However, we remain apprehensive about risks that the
company faces due to its high dependence on advertising
revenue.
Currently, we have a long-term "Neutral" recommendation on The
New York Times Company. However, the company holds Zacks #4 Rank
that translates into short-term 'Sell' rating.
NEWS CORP INC-A (
NWSA
): Free Stock Analysis Report
NY TIMES A (
NYT
): Free Stock Analysis Report
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