New York Times Stock Falls 20% After Weak Earnings Projection
The New York Times stock dropped 20% Wednesday after the company said ad revenue would decline in the third quarter of 2019.
The company said it expects both its print and digital ad revenue to decline in the high single-digits next quarter, Business Insider reported.
“We expect the second half of 2019 to be somewhat more challenging for digital advertising than the first half, with this year’s revenue comping against our large gains in the third and fourth quarters of 2018,” NYT Chief Executive Officer Mark Thompson said in a statement.
The publisher brought in $436.25 million in ad revenue compared to the $439.25 million analysts estimated it would make in the second quarter of 2019, and earnings per share diluted from continuing operations of $0.17 compared to $0.15. Its operating profit also decreased by $2.1 million from the same quarter last year, according to BI.
NYT does, however, expect to gain more digital-only subscribers and a 25-30% increase in non-ad revenue in the third quarter. It added 197,000 new digital-only subscribers during in the second period, bringing its total amount of subscribers to 4.7 million.
Thompson said the decrease in profit in the second quarter is likely the result of “continued investment into growing our subscription business.”
Analysts expect subscription sales to increase from low-to mid-single digits in the third quarter and digital-only subscription revenue to reach the mid-teens, BI reported.
The Times came under fire Tuesday for changing the headline on its featured article from “Trump urges unity vs. racism” to a different headline that read, “Assailing hate but not guns,” after its readers said the paper was not being critical enough of the president.
Trump responded to the change on Twitter, saying, “‘Trump Urges Unity Vs. Racism,’ was the correct description in the first headline by the Failing New York Times, but it was quickly changed to, ‘Assailing Hate But Not Guns,’ after the Radical Left Democrats went absolutely CRAZY!”
..”This is an astounding development in journalism. I’ve never seen it happen before, I’ve just never seen anything like this! Is that journalism today? I don’t think so!” Mark Penn, Former Clinton Advisor. @TuckerCarlson After 3 years I almost got a good headline from the Times!
— Donald J. Trump (@realDonaldTrump) August 7, 2019
“Fake News – That’s what we’re up against. … After 3 years I almost got a good headline from the Times!” he continued.
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