The current economic scenario does not look promising for
publishing companies, which are bearing the brunt of waning print
advertising demand, and
The New York Times Company
) is no exception. However, the company witnessed sturdy
circulation growth during the six-month period ending Mar 31,
2013, riding on digital subscription initiatives.
According to the data released by Alliance for Audited Media
("AAM"), total average circulation, including print and digital,
registered an increase of 18% to 1,865,318 for Monday to Friday
publications and 16% to 2,322,429 for Sunday editions during the
Notably, digital circulation outpaced the print circulation.
For weekdays, average digital circulation rose 41% to 1,097,467,
whereas average print circulation dropped 6.2% to 731,395.
Average digital circulation for Sunday surged 45% to 1,065,940,
while average print circulation fell 0.9% to 1,254,506.
The data suggests that print circulation is continuing to lose
its grip, whereas digital circulation is gaining traction, as
more and more people are visiting the company's website through
smartphone and iPad applications. However, the only respite for
print editions is the Sunday home delivery circulation, which
witnessed a marginal increase of 0.5% to 1,023,956.
The New York Times
The Wall Street Journal
-- the flagship newspaper of
) -- also experienced a rise in circulation and holds on to its
leading position as per the data available from AAM. Circulation
for daily newspapers rose 12.3% to 2,378,827. However,
-- the iconic brand of
Gannett Co., Inc.
) -- saw its circulation declining 7.9% to 1,674,306 and remained
at the third position.
The New York Times
now occupies the second position.
The Washington Post
The Washington Post Company
) witnessed a drop of 6.5% in circulation to 474,767.
Although The New York Times Company has a sturdy total
circulation, its advertising volume continues to remain under
pressure as advertisers are shying away from making any upfront
commitments in an economy which is showing an uneven recovery.
Total advertising revenue slid 11.2% to $191.2 million in the
first quarter of 2013. Print advertising revenue declined 13.3%
during the quarter.
The sluggish advertising compelled this Zacks Rank #4 (Sell)
stock to post earnings of 4 cents a share that missed the Zacks
Consensus Estimate by a penny and fell 20% from 5 cents delivered
in the year-ago quarter.
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
the risks the company faces due to its high dependence on
The company intends to transform itself and lessen its
reliance on traditional advertising. In doing so, the company
wishes to launch lower-priced as well as premium subscription
based model to target different masses according to their
appetite, and emphasize on online video production and brand
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