New York Times tops profit estimates as digital subscriptions soar
The New York Times Co reported strong revenue growth and a better-than-expected quarterly profit on Thursday as the newspaper publisher signed up more digital subscribers, driven by fervent marketing, cost cuts and the so-called "Trump bump".
The results sent shares of the company to their highest since mid-2008. The stock was up 3.5 percent at $19.00 in late morning trading.
The Times has in recent quarters posted strong subscription numbers in its digital business that has helped offset falling print sales.
In the first quarter of 2017, the company posted its biggest increase in quarterly revenue in six years, as subscriptions surged amid a media storm triggered by the U.S. election.
That momentum continued in the second quarter 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. Revenue climbed 9.2 percent to $407.1 million in the quarter, marking the biggest increase in many years.
The Times has also marketed unbiased reporting to boost sales amid concerns over the prevalence of fake news, a move also adopted by other media companies.
Its marketing has included deep discounts, promotions and a rare television commercial.
The Times has also convinced subscribers to pay for non-news products such as daily crossword puzzles and cooking recipes.
The moves resulted in the company notching up 2.3 million paid digital-only subscriptions at the end of the second quarter ended June 25. The number was up 63.4 percent from a year earlier and represented 114,000 new subscribers in the quarter.
Digital advertising revenue, which makes up nearly 42 percent of overall advertising revenue, rose 22.5 percent to $55.2 million.
But print advertising revenue continued to fall, dipping 10.5 percent, as the medium attracts fewer paying readers with more people getting their daily news fix online.
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 in the latest quarter.
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.
To cut costs and streamline operations, the Times has offered buyouts to employees reduced the number of editors.
Operating costs rose 11 percent, driven by severance payments related to layoffs.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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