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Factors Likely to Decide NY Times (NYT) Fate in Q4 Earnings

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The New York Times Company NYT is slated to report fourth-quarter 2018 results on Feb 6. In the trailing four quarters, it has outperformed the Zacks Consensus Estimate by average of 20%. In the last reported quarter, this diversified media conglomerate delivered a positive earnings surprise of 15.4%.

How are Estimates Faring?

The New York Times Company’s fourth-quarter earnings are likely to decline year over year. This is quite evident from the Zacks Consensus Estimate for the quarter under review, which is pegged at 28 cents, down from 39 cents reported in the year-ago period. We note that the Zacks Consensus Estimate has remained stable in the last 30 days.

The Zacks Consensus Estimate for revenues is $479.3 million, down roughly 1% from the year-ago quarter. We note that total revenue of this NY-based company had increased 8.2% in the last reported quarter.

Let’s delve deeper and analyze 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 coping with soft print advertising revenue on account of increasing online readership. Management had previously highlighted that total advertising revenue is likely to decline in the mid-single digits during the fourth quarter of 2018. Moreover, with adjusted operating costs expected to increase in the mid-single digits during the final quarter, operating profit is likely to be hurt.

Surely, the company has emerged from being a sole provider of news content and advertising on print publications. The company is diversifying its business, adding new revenue streams, strengthening balance sheet and restructuring portfolio. It had offloaded assets in order to re-focus on its core newspapers and pay more attention to its online activities, as evident from its pay-and-read model.

The number of paid digital subscribers reached 3,095,000 at the end of the third quarter of 2018 — rising 203,000 sequentially and 24.4% year over year. Subscription revenue grew 4.5% primarily due to increase in the number of subscriptions to the digital-only products. Revenue from digital-only subscriptions products surged 18.1%. Management now projects digital-only subscription revenue to rise in the high-single digits during the final quarter of 2018.

What the Zacks Model Unveils?

Our proven model does not conclusively show 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 #3 and an Earnings ESP of 0.00%, 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:

World Wrestling Entertainment WWE has an Earnings ESP of +26.31% and a Zacks Rank #1.

Discovery, Inc. DISCA has an Earnings ESP of +10.75% and a Zacks Rank of #2.

Gannett Co. GCI has an Earnings ESP of +5.88% and a Zacks Rank of #3.

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World Wrestling Entertainment, Inc. (WWE) : Free Stock Analysis Report
 
Discovery, Inc. (DISCA) : Free Stock Analysis Report
 
Gannett Co., Inc. (GCI) : Free Stock Analysis Report
 
The New York Times Company (NYT) : Free Stock Analysis Report
 
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