NY Times rises to 9-year high as digital makeover takes center stage
By Laharee Chatterjee
(Reuters) - The New York Times Co said on Thursday its digital subscription revenue overtook print advertising revenue for the first time — a key milestone in the 166-year old publisher's efforts to transform itself into a digital media powerhouse.
The company's shares rose as much as 7 percent to their highest since the 2008 financial crisis as the publisher also reported better-than-expected quarterly results, aided by fervent marketing, cost-cutting and the so-called "Trump bump".
The Times has in recent quarters posted strong subscription numbers in its digital business that has helped offset falling print sales.
"We passed 2 million paid digital-only new subscribers, a first for any news organization," Chief Executive Mark Thompson said on a conference call. "But we're still determined to move faster in our digital transformation."
Print advertising revenue in the second quarter fell 10.5 percent and represented 19 percent of the company's revenue, while digital subscription revenue surged 46 percent to account for just over 20 percent.
The results come off a robust first quarter, when the Times posted its biggest increase in revenue in six years amid a media storm triggered by the U.S. election.
That momentum continued in recent months as subscriptions benefited partly from the "Trump bump" — the effect of U.S. President Donald Trump's attacks on the paper as well as the Times' coverage of his administration.
The Times has stepped up marketing efforts by offering deep discounts, running a rare television commercial and touting a record of unbiased reporting amid concerns over the prevalence of fake news.
It has also convinced subscribers to pay for non-news products such as daily crossword puzzles and cooking recipes, both of which have boosted digital revenue.
The company had 2.3 million paid digital-only subscriptions at the end of the second quarter ended June 25, adding 114,000 new subscribers in the quarter.
"While the company's overall trends are all moving in the right direction, sustainability of present trends remains to be seen," Barclays analysts said.
Total revenue climbed 9.2 percent to $407.1 million, marking the biggest increase in many years.
The Times reported a profit of $15.6 million in the second quarter compared to a loss of $211,000 a year earlier. On a per-share basis, it earned 9 cents per share.
Excluding one-time items, the company earned 18 cents per share, beating analysts' average estimate of 14 cents, according to Thomson Reuters I/B/E/S.
(Reporting by Laharee Chatterjee in Bengaluru; Additional reporting by Sheila Dang in New York; Editing by Sai Sachin Ravikumar)
