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Will New York Times Company (NYT) Report Higher Q2 Earnings?

Zacks Equity Research

The New York Times Company NYT is scheduled to report second-quarter 2019 financial numbers on Aug 7, before the opening bell. This New York-based company is likely to register improvement in the bottom line when it reports quarterly numbers. Notably, this diversified media conglomerate had comfortably surpassed the Zacks Consensus Estimate in the trailing four quarters.

In the preceding four quarters, the company outperformed the Zacks Consensus Estimate by an average of 29.4%. In the last reported quarter, the company delivered positive earnings surprise of 66.7%.

Drawing focus back on the to-be-reported quarter, the Zacks Consensus Estimate for earnings is currently pegged at 19 cents, which indicates an improvement of 11.8% from the year-ago quarter’s figure. We note that the Zacks Consensus Estimate has remained stable in the past 30 days. The Zacks Consensus Estimate for revenues is pegged at $443.7 million, suggesting growth of about 7% from the prior-year period. We note that both the top and the bottom line had increased 6.1% and 17.6%, respectively, in the last reported quarter.

Factors Holding Key

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 be flat during the second quarter of 2019. Moreover, adjusted operating costs are expected to increase around 8-10% during the to-be-reported quarter.

The New York Times Company has been contemplating new avenues of revenue generation in a bid to counter dwindling print advertising revenues. Rapid digitization in the core areas of advertising, subscriptions and sales, printing, and distribution services has turned out to be a major source of revenues.

The company is concentrating on online activities, as evident from its pay-and-read model. The company is not only gearing up to become an optimum destination for news and information but is also focusing on service journalism, with verticals like Cooking, Watching and Well.

Notably, the number of paid digital subscribers reached 3,583,000 at the end of first quarter of 2019 — rising 223,000 sequentially and 28.7% year over year. Subscription revenue grew 3.9% principally due to increase in the number of subscriptions to the company’s digital-only products. Revenue from digital-only subscriptions products jumped 15.1%.

Management now projects total subscription revenue in the second quarter to increase in the low to mid-single digits, while digital-only subscription revenue is likely to rise in the mid-teens.

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.

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:

Parsons Corporation PSN has an Earnings ESP of +5.26% and a Zacks Rank of #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Discovery, Inc. DISCA has an Earnings ESP of +5.05% and a Zacks Rank #3.

Viacom Inc. VIAB has an Earnings ESP of +2.08% and a Zacks Rank of #3.

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