New York Times Highlights Print Media Problems
The problems facing print media are well known and, as members of the media ourselves, we know all about the perils facing out print-based brethren. Even a newspaper institution like the New York Times (NYSE: NYT) is feeling the pinch, which is largely driven by the continual decline of advertising revenue.
The New York Times saw is fourth-quarter profit fall, although it still surpassed Wall Street expectations thanks to its online edition adding subscribers. NYT forecasts that ad revenue will remain flat.
The analysts certainly are not panicking, with Citi saying on Thursday that, “Revenue of $643m (-2.8%) was a little below our/consensus $646m (-2.4%) estimate on weaker results as About.com EBITDA of $151m (+3.1%) was ahead of our/consensus estimates of $150m (+2.1%) /$146m (-0.4%) as better News Media Group offsetting weaker About results.”
Meanwhile, J.P. Morgan said that, “NYT reported good Q4 results with adjusted EPS of $0.45, excluding nonrecurring charges related to an asset write-down and management changes. This compares to our expectation of $0.44, which was above consensus of $0.42. Adjusted EBITDA of $151M, a 23.5% margin, was well ahead of our $144M (22.4% margin) estimate.”
According to Reuters, the New York Times rolled out an online pay system in 2011 to tap subscribers using digital mediums to read newspapers.
The numbers make for mixed reading. Paid digital subscribers rose 20 percent to approximately 390,000, Q4 digital advertising revenue fell 4.9 percent, and Q4 advertising revenue fell 7 percent to $358.5 million.
The company's digital subscription strategy also beefed up circulation revenue, which rose 5 percent to $241.6 million in 4Q.
Evercore Partners said that, “Our target price of $9 is based on a sum-of-the-parts valuation, discounted cash flow, and comparative cash flow multiples,” but admitted the risk that, “National advertising accounts for the bulk of advertising at the company's largest property, The New York Times. Renewed weakness in this category is a risk. Ongoing deterioration in print circulation and, in turn, ad revenues remains a major long term threat.”
J.P. Morgan said, “We expect further commentary related to progress on the digital initiatives, uses of cash following asset dispositions and some color surrounding management changes.”
Shares in NYT, which have gained an impressive 3 percent in three months, were down 2 percent at $7.49 on Thursday.
