How is NY Times (NYT) Poised Ahead of Q2 Earnings Release?

The New York Times Company NYT is likely to register a decrease in the top line when it reports second-quarter 2020 numbers on Aug 5, before the market opens. The Zacks Consensus Estimate for revenues is pegged at $388.5 million, suggesting a decline of about 11% from the prior-year reported figure.

The company’s bottom line is also expected to fall year over year. The Zacks Consensus Estimate for earnings for the quarter under review has remained stable at 5 cents in the past 30 days. The figure indicates a sharp decline from 17 cents reported in the year-ago period.

Notably, this diversified media conglomerate has a trailing four-quarter earnings surprise of 13.1%, on average. In the last reported quarter, the company delivered an earnings surprise of 30.8%.

Factors to Note

The New York Times Company has been grappling with declining print readership and soft advertising revenues for quite some time now. Readers’ preference for accessing news online, mostly free, has made the print-advertising model increasingly redundant. Also, the ongoing pandemic has compelled industries across the board to curtail marketing expenditures.

Management on its last earnings call guided a decline of approximately 50-55% in total advertising revenues for the quarter to be reported primarily owing to the impact of the coronavirus. Additionally, the company had projected a slump of roughly 40-45% in digital advertising revenues.

Nonetheless, the company has been making concerted efforts to lower dependency on traditional advertising and focus on digitization. The company has been diversifying business, adding new revenue streams and streamlining operations to increase efficiencies. It has been gearing up to become not only an optimum destination for news and information but is also focusing on lifestyle products and services.

Moreover, with readers’ increasing preference for accessing news online, the company has been concentrating on online activities, as evident from its pay-and-read model. We note that management had earlier forecast an increase of mid-to-high-single digits in total subscription revenues and a jump of high-twenties in digital-only subscription revenues for the second quarter.

The New York Times Company Price, Consensus and EPS Surprise

The New York Times Company Price, Consensus and EPS Surprise

The New York Times Company price-consensus-eps-surprise-chart | The New York Times Company Quote

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for The New York Times Company this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Although The New York Times Company carries a Zacks Rank #3, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combination

Here are companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Maxar Technologies MAXR has an Earnings ESP of +31.71% and a Zacks Rank of #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The ODP Corporation ODP has an Earnings ESP of +2.44% and a Zacks Rank of #2.

Roku, Inc. ROKU has an Earnings ESP of +34.74% and a Zacks Rank of #3.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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