Please ensure Javascript is enabled for purposes of website accessibility

Why The New York Times Co. Stock Jumped Thursday

By Daniel Sparks - Feb 8, 2018 at 2:25PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors love The New York Times' fourth-quarter results. Here's why.

What happened

Shares of The New York Times (NYT -0.46%) jumped sharply on Thursday, following the company's fourth-quarter earnings release. The newspaper stock rose as much as 15.8%, and is up 13.1% at the time of this writing.

Investors in The New York Times were likely pleased with the company's higher-than-expected revenue and profit. It reported revenue and non-GAAP earnings per share of $484 million and $0.39, respectively. On average, analysts were expecting revenue of $467 million and non-GAAP EPS of $0.29.

A man looking at his smartphone in the back of a taxi

Image source: Getty Images.

So what

Highlighting the company's strong growth, revenue and adjusted EPS climbed 10% and 30%, respectively.

The New York Times did benefit from an extra week during the quarter. But even excluding that week, revenue still increased 3.5% year over year.

Growth was fueled by a 19.2% year over year increase in subscription revenue (11% when excluding the benefit of the quarter's extra week), which helped offset a 1.3% decrease in advertising revenue.

"Subscription revenues in the fourth quarter of 2017 rose primarily due to significant growth in recent quarters in the number of subscriptions to the Company's digital-only products," management said. Revenue from digital-only subscription products was up 51.2% year over year, hitting $96.3 million.

Now what

In the first quarter of 2018, The New York Times said it expects strong subscription revenue growth to persist, rising in the mid- to high single digits compared to the first quarter of 2017.

Longer-term, CEO Mark Thompson was optimistic: "We believe there remains a large opportunity to continue to extend our subscription reach and will continue to invest in areas of the business that will allow us to achieve that growth."

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The New York Times Company Stock Quote
The New York Times Company
NYT
$28.47 (-0.46%) $0.13

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/05/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.