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NY Times (NYT) Q1 Earnings Likely to Increase: Here's Why

The New York Times CompanyNYT is slated to report first-quarter 2018 results on May 3. In the trailing four quarters, it has outperformed the Zacks Consensus Estimate by an average of 49.1%. In the last reported quarter, this diversified media conglomerate delivered a positive earnings surprise of 30%. Consequently, investors are keeping their fingers crossed and hoping that the company surpasses earnings estimate even this time.

How are Estimates Shaping Up?

After registering a bottom-line increase of 30% in the final quarter of 2017, The New York Times Company is likely to record year-over-year growth of 27.3% in the first quarter of 2018 as well. This is quite evident from the Zacks Consensus Estimate for the quarter under review, which is pegged at 14 cents compared with 11 cents reported in the year-ago quarter. We note that the Zacks Consensus Estimate has remained stable in the last 30 days.

Analysts polled by Zacks now project revenues of $406.6 million, up roughly 2% from the year-ago quarter. If all goes well, this may be the second straight quarter of top-line beat for the company. We note that total revenue of this NY-based company had increased 10% in the last reported quarter.

Let's delve deeper and find out the factors impacting the results.

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 Quote

Factors Holding Key to NY Times' Performance

The New York Times Company has been realigning cost structure and streamlining operations to increase efficiencies. It has offloaded assets that bear no direct relation with the core operations in order to concentrate on online activities. The company is fast acclimatizing to the changing face of the multiplatform media universe, and has already included mobile and reader application products in its portfolio.

The company notified that the number of paid digital subscribers reached 2,644,000 at the end of the fourth quarter of 2017 - rising 157,000 sequentially and 41.8% year over year.

Subscription revenue grew 19.2%, primarily due to increase in the number of subscriptions to the digital-only products. Management had earlier guided that total subscription revenue in the first quarter of 2018 is likely to increase in the mid to high-single digits.

Apart from gearing up to become an optimum destination for news and information, The New York Times Company is now focusing on service journalism with verticals like Cooking, Watching and Well. In this regard, it acquired The Wirecutter and its sister site - The Sweethome - that recommends people about technology gear, home products and other consumer services.

Analysts pointed out that increasing online readership has made the print-advertising model increasingly redundant. We noted that print advertising revenue fell 8.4%, while total advertising revenue declined 1.3% in the final quarter of 2017. The New York Times Company had previously highlighted that total advertising revenue in the first quarter is projected to decline in the mid to high-single digits.

What Does the Zacks Model Say?

Our proven model does not conclusively shows that The New York Times Company is likely to beat estimates this quarter. A stock needs to have both - a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP - for this to happen. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

The New York Times Company has a Zacks Rank #2 but an Earnings ESP of 0.00%. Consequently, making surprise prediction difficult. You can see the complete list of today's Zacks #1 Rank stocks here .

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:

The Walt Disney Company DIS has an Earnings ESP of +1.34% and a Zacks Rank of #3.

IMAX Corporation IMAX has an Earnings ESP of +5.67% and a Zacks Rank #3.

Discovery Communications DISCA has an Earnings ESP of +0.39% and a Zacks Rank of #3.

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The New York Times Company (NYT): Free Stock Analysis Report

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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.


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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