The New York Times Co. ( NYSE: NYT ) is 4.9% higher after the company posted a strong profit beat in its third-quarter earnings and logged more growth in digital subscribers, as well as raising its full-year profit outlook.
Revenue grew 8% year-over-year, mostly in line with expectations, to $547.7M as the company wrestled with the industrywide slowdown in digital advertising.
That figure came as subscriptions continued to make up for advertising in the revenue stream. Total subscriptions came in at 10.75M, vs. 10.5% expected - and digital-only subs were 10.02M, again above forecasts of 8.8M.
“The biggest story of our third quarter was continued progress on the bundle, with mounting evidence that our strategy is working," said CEO Meredith Kopit Levien. "It was our best quarter yet for bundle net additions, with a record number of starts and a record percentage of our total starts taking the bundle."
The results "demonstrate steady progress toward becoming the ‘essential subscription’ for every English-speaking person seeking to understand and engage with the world," she said.
Digging into the revenue gain, advertising revenue dipped fractionally year-over-year to $110.5M, but subscription revenues rose 12% to $382.7M. Other revenue landed at $54.5M.
In advertising, the flatness came as digital continued to make up for secular declines in print ads: Digital ad revenue came in above expectations at $70.3M, while print advertising disappointed at $40.2M.
The real optimism came in the company's outlook. It raised expectations for full-year adjusted operating profit to $320M-$330M, the high end of its previous range, as well as lower capital expenditures than previously expected ($50M vs. a previous $55M).
For the fourth quarter, The New York Times Group (for comparability to before The Athletic acquisition) expects digital-only subscription revenues to rise about 20%, with total sub revenues rising 10-13%. It sees digital ad revenues and the larger total ad revenue number dropping about 10%.
Including The Athletic means as a company NYT is expecting Q4 digital-only subscription revenues to jump 30-33%, meaning total sub revenues would rise 17-20%. With an ad plan, The Athletic now also mitigates the forecast decline in ad revenues to the mid-single digits.
The company is changing its fiscal year to line up with the calendar year, fixing what was set to be a six-day offset. With the 2022 fiscal year now ending on Dec. 31, 2022, the company's fourth quarter will contain an extra six days compared with the fourth quarter of 2021.
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New York Times jumps 5% as subscriber growth spurs boost to profit outlook