Digital ad trends improve at New York Times
The New York Times Co reported better-than-expected quarterly revenue and profit on Thursday as advertising sales improved and more subscribed to its flagship newspaper.
Shares of the New York Times rose 5.3 percent to $14.58 in Thursday morning trade after results were released.
The company, which is now comprised of its namesake newspaper only has struggled in recent quarters as advertisers pulled back spending.
But during the fourth quarter, the company made some progress, especially with digital advertising revenue.
Print and digital advertising revenue decreased 1.6 percent and 0.2 percent respectively excluding an extra week in the fourth quarter 2012. That is an improvement from the third quarter, when digital advertising revenue fell 3.4 percent.
The company said it expects advertising revenue to trend at the same level this quarter as in the fourth quarter.
The New York Times had been particularly hit by changing trends in digital advertising - once a bright spot - as advertising exchanges drove the price of ads down.
New York Times CEO Mark Thompson said in a statement that advertising revenue had the best quarterly performance in more than three years.
To help mitigate the drain of print advertising, the New York Times rolled out a digital subscription pay model that is nearing its third year anniversary.
Subscription revenue grew 2.7 percent to $207.6 million and now represents more than 45 percent of total revenue.
Revenue from digital-only subscription packages increased 13.7 percent to $39.1 million. The company plans to launch a new tier of digital subscriptions to help attract new readers this year.
Evercore analyst Doug Arthur said the new packages could be a "game changer" for the company, especially the "lower costs ones."
Total fourth quarter revenue fell 5.2 percent to $443.9 million, beating analysts estimates for $441 million, according to Thomson Reuters I/B/E/S.
Excluding an extra week in the same period last year, total revenue inched up 0.4 percent.
Net income from continuing operations fell to $38.6 million, or 24 cents per share, from $118 million, or 76 cents per share, in the same period a year earlier.
Excluding special items such as the sale of employment website Indeed.com in the fourth quarter of 2012, earnings per share were 26 cents compared with analysts' forecast of 16 cents.