We recently upgraded our long-term recommendation on
The New York Times Company
) to Outperform, mainly on the back of the company's
better-than-expected first-quarter 2012 results.
The company's first-quarter 2012 earnings of 8 cents a share,
handily surpassed the Zacks Consensus Estimate of 2 cents, and
improved significantly from a break-even in the prior-year
We remain impressed with the company's efforts to add diverse
revenue streams, which include a circulation pricing model and a
pay-and-read model for NYTimes.com, the International Herald
Tribune and BostonGlobe.com, to make it less susceptible to the
The company is also on the process of adapting to the changing
face of the multiplatform media universe, which includes mobile,
social media networks and reader application products in its
These strategic moves are paying off well as the quarter
reflects favorable response to the digital subscription packages,
increase in circulation revenue and fall in attrition rate as
subscribers to the
New York Times'
print version are able to access content or articles online as well
as on all applications of The Times for no additional charge.
On the cost front, the company has been realigning its cost
structure, and streamlining its operations to increase
efficiencies, which have contributed to improved operating
As a part of its ongoing strategy to completely offload assets
that bear no direct relation with the core operations, The New York
Times Company divested its remaining stake (210 Class B units) in
the Fenway Sports Group in May 2012. The company also completed the
sale of Regional Media Group to re-focus on its core newspapers
while paying more attention to its online activities.
Keeping pace with our upgraded long-term recommendation, The New
York Times Company, which competes with
Gannett Company Inc.
), currently retains a Zacks #2 Rank, indicating a short term 'Buy'
rating on the stock.
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