What happened

The New York Times (NYSE:NYT) outperformed a rallying stock market last month. Shares rose 11% in May compared to a 4.5% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

The rally added to significant recent gains, with the stock up nearly 30% through the first five months of 2020.

A man holding a tablet computer while drinking coffee.

Image source: Getty Images.

So what

The newspaper giant on May 6 announced mixed first-quarter earnings results that covered an especially volatile time for the industry. Sales inched higher by just 1%, and operating profit fell, mainly due to slumping advertising spending in response to challenging economic conditions and the COVID-19 pandemic.

On the other hand, the paper logged its best quarter for digital subscription growth yet, with 587,000 new users signing up as members. These gains occurred despite most of the core news offering being made freely accessible through the novel coronavirus pandemic. "The Times' business model," CEO Mark Thompson said, "with its growing focus on digital subscription growth and diminishing reliance on advertising, is very well positioned to ride out this storm and thrive in a post-pandemic world."

Now what

Thompson and his team see advertising falling by between 50% and 55% in the fiscal second quarter compared to just a 15% decrease last quarter. There is "limited visibility" beyond that point, too. However, the Times now counts over 4 million subscribers to its digital-only platform. That growing base should support cash flow while advertising sales are pressured across the media industry.