NY Times Rises On Subscriber Growth As JPMorgan Sees Momentum Continuing

Shares of New York Times (NYT) have jumped after the company reported better than expected third quarter results and strong subscriber growth. Notably, the Times’ 203,000 total net new digital-only subscriptions represents the highest gain in digital subscribers in a quarter since the “Trump bump” in the fourth quarter of 2016 and the first quarter of 2017 after the presidential election. Commenting on the announcement, JPMorgan analyst Alexia Quadrani told investors that she is “extremely encouraged” by the results and sees momentum continuing on digital subscriber additions.

QUARTERLY RESULTS: New York Times reported third-quarter adjusted earnings per share of 15c and revenue $417.35M, both above consensus of 11c and $408.54M, respectively. The number of digital subscribers showed a net increase of roughly 203,000, with 143,000 of those signing on for digital new products and the remainder paying for the company’s cooking and crossword features. Operating profits rose 30% to $41.4M in the period. Mark Thompson, president, and CEO, said, “This was a strong third quarter for the company. […] We passed two significant milestones, and now have more than 3M digital-only subscriptions and more than 4M total subscriptions. We’re executing on our subscription-first strategy; this quarter, subscription revenues accounted for nearly two-thirds of the company’s revenues. We’re investing aggressively in our journalism, product, and marketing and are seeing tangible results in our digital growth. Turning to advertising, as expected, we are seeing a much stronger second half of the year. We had an exceptional third quarter with digital advertising up 17% and growth of 7% in total advertising”. Responding to a question during its earnings conference call from JPMorgan’s Quadrani regarding potential subscription drivers, including stories that may have caused a spike in adds, the company highlighted the “important role” played by the $1 per week promotion. NY Times also acknowledged that “there were some spikes” during the quarter related to specific stories, namely “the anonymous editorial, the story about family separation at the border and the one on the Trump family”.