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NY Times (NYT) Q1 Earnings: What are the Factors at Play?

The New York Times CompanyNYT , a diversified media conglomerate, is slated to report first-quarter 2017 results on May 3. In the trailing four quarters, it has outperformed the Zacks Consensus Estimate by an average of 13.3%. In the preceding quarter, the company witnessed a positive earnings surprise of 30.4%. Let's see how things are shaping up for this announcement.

What to Expect?

The question lingering in investors' minds now is whether the company will be able to continue with its positive earnings surprise streak in the quarter to be reported. The current Zacks Consensus Estimate for the quarter under review is 6 cents compared with 10 cents reported in the year-ago period. We note that the Zacks Consensus Estimate has been stable lately. Analysts polled by Zacks expect revenues of $385 million, up over 1% from the year-ago quarter.

The New York Times Company forms part of the Consumer Staples sector, which occupies a space in the bottom 38% of the Zacks Classified sectors (10 out of 16). As per the latest Earnings Preview report, total earnings and revenues for the sector are anticipated to increase by 4.3% and 4%, respectively. We noted that the Consumer Staples sector has outperformed the broader market in the past three months. In the said time frame, this Zacks categorized sector gained 5.6%, while S&P 500 index advanced 4.8%.

New York Times Company (The) Price, Consensus and EPS Surprise

New York Times Company (The) Price, Consensus and EPS Surprise | New York Times Company (The) Quote

Factors at Play

The New York Times Company is diversifying business, adding new revenue streams, strengthening balance sheet along with restructuring portfolio. It has offloaded assets in order to re-focus on core newspapers and pay more attention to its online activities. We believe these moves will have a favorable impact on the quarter to be reported.

However, advertising revenue remains an area of concern for the company. Total advertising revenue during the fourth quarter of 2016 dropped 9.7%. Print advertising revenue fell 20.4% in the quarter. The company anticipates total advertising revenue in the first quarter of 2017 to decline in the high-single digits.

The New York Times Company's dwindling top- and bottom-line performance also remains a primary concern for investors. A look at the company's performance in fiscal 2016 unveils that total revenue declined 1.2%, 2.7%, 1% and 1.1% in the first, second, third and fourth quarters, respectively. Maintaining the same chronological order, we note that earnings per share fell 9.1%, 15.4%, 33.3% and 18.9%, respectively.

Nevertheless, we noted that The New York Times Company has outperformed the Zacks categorized Publishing-Newspapers industry in the past three months. In the said time frame, the stock has increased 6.7%, while the industry has declined 3.2%.

What Does the Zacks Model Say?

Our proven model does not conclusively show that The New York Times Company is likely to beat earnings estimates this quarter. This is because 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 an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 6 cents. The company's Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.

Stocks Poised to Beat Earnings Estimates

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

Best Buy Co. Inc. BBY has an Earnings ESP of +12.50% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

Lowe's Companies, Inc. LOW has an Earnings ESP of +2.83% and a Zacks Rank #2.

L Brands, Inc. LB has an Earnings ESP of +4.17% and a Zacks Rank #3.

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New York Times Company (The) (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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