Shares of The New York Times Co. rose over 6 percent to $19.50 in midday trading on Thursday following the company’s report of better-than-expected second-quarter earnings, which was fueled by revenue from digital subscription and digital advertising.
The company reported second-quarter net income of $15.6 million, or 9 cents a share — although adjusted earnings per share tallied 18 cents. This compared favorably with the same period last year, when the company reported a loss of $211,000 or break even on a share basis.
Total revenue for the second quarter of 2017 increased 9.2 percent to $407.1 million from $372.6 million in the second quarter of 2016 and subscription revenues increased 13.9 percent, while advertising revenues increased 0.8 percent and other revenues rose 12.8 percent. Wall Street expected 14 cents a share on revenue of $393.9 million.
“During the quarter, we surpassed two million digital-only news subscriptions, doubling our digital subscriber base over a two-year period. The company added 93,000 net digital-only news subscriptions, a 69 percent increase in the number of subscription additions compared with the same quarter last year, and total advertising revenue grew for the first time since [the third quarter of] 2014, driven by continued strength in digital advertising,” said Mark Thompson, president and chief executive officer of the company. “We believe that more and more people are prepared to pay for high-quality in-depth journalism that helps them make sense of the world.”
This latest report comes during an anxious time for insiders as the company prepares to change the editorial structure of the newsroom, a controversial move that includes eliminating editing positions and the stand-alone copy desk that has long been an institution at the newspaper. That structural change will result in a severance charge of $19 million.
Executive vice president and chief operating officer Meredith Kopit Levien added there has been a slight uptick in less affluent new subscribers from the middle of the country following the presidential election — notable considering the divide evidenced by the results of the election.
Looking forward to the third quarter, the company said it expects revenue from subscriptions to increase at a similar rate. Overall advertising revenue is expected to decrease in the next quarter, but digital advertising is expected to see growth in the low-double digits.