The New York Times Company tanks 20% after saying ad revenue will decline next quarter
Shares of The New York Times Company plunged as much as 20% on Wednesday after the publisher said it expects total advertising revenue to fall next quarter.
The newspaper publisher reported second quarter results on Wednesday that beat expectations for earnings per share but fell short of revenue estimates.
The New York Times also said it added 197,000 new digital-only subscribers during the period, bringing the publication's total subscriber base to 4.7 million.
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The New York Time Company saw its stock tumble as much as 20% on Wednesday after the newspaper publisher said it expects advertising revenue to shrink by high-single digits in the third quarter.
The publisher reported second quarter financial results on Wednesday. Here are the key numbers:
Revenue: $436.25 million, compared to $439.25 million estimated by analysts
Earnings per share: $0.17, compared to $0.15 estimated by analysts
Operating profit: $37.9 million, down from $40 million last year
The company said it expects total ad revenue to decline in the high-single digits in the third quarter compared to the same period last year. Digital ad revenue, which is becoming a bigger chunk of the publisher's business, is expected fall by high-single digits as well.
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"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," Chief Executive Officer Mark Thompson said in a statement.
The sluggish forecast is a concerning sign for the New York Times as the segment accounted for 48.1% of the publication's total ad revenue in the second quarter.
Subscription sales are expected to jump by low-to mid-single digits in the third quarter, with digital-only subscription revenue climbing in the mid-teens.
The Times also said it added 197,000 digital-only subscribers during the period bringing its total subscriber base to 4.7 million. The publication's goal is to hit 10 million total subscriptions by 2025.
"While profitability declined in the quarter, that is in large part a result of continued investment into growing our subscription business," Thompson said.
The New York Times Company is up roughly 40% year-to-date.