During and after the 2016 election, we repeatedly hear from Donald Trump about how the mainstream media, particularly the New York Times, is failing. Let’s look at the numbers and see what is reality and what is myth.
The latest report available for the Times is the fourth quarter report for 2016 which also gives us full-year results. Let’s start with a summary of the fourth quarter 2016 results with fourth quarter 2015 results shown in brackets:
Total revenues – $439.7 million ($444.7 million)
Diluted earnings – $0.24 per share ($0.31 per share)
Adjusted earnings -$ 0.30 per share ($0.37 per share)
Operating profit – $55.6 million ($87.7 million)
Adjusted operating profit – $95.7 million ($117.7 million)
Net income on a per-share basis look particularly poor, dropping 25.8 percent from $0.31 per share in the same quarter of 2015 to $0.23 per share in Q4 2016.
Let’s look at the full year 2016 results with full year 2015 results shown in brackets:
Operating profit: $101.6 million ($136.6 million)
Adjusted operating profit – $240.9 million ($289 million)
Income from continuing operations – $0.19 per share ($0.38)
Net income – $0.18 per share ($0.38)
As you can see, on a year-over-year basis, net income looks particularly weak, falling 52.6 percent on an annual basis.
Here is a table showing a summary of advertising revenues by category:
The weakness in advertising revenue is expected to continue with management postulating that total advertising revenues in the first quarter of 2017 expected to decrease in the high single digits compared to the first quarter of 2016. On top of that, operating costs are also expected to increase in the mid- to high-single digits in Q1 2017 compared to the same quarter in 2016.
While the company definitely is not on life support, I’ll let you make up your mind about The New York Times and its future, particularly given the weakness in its advertising revenue stream. That said, I’d like to close this posting with a quote from Mark Thompson, President and CEO of The New York Times Company, from the Q4 earnings conference call:
“We are a smartphone-first, subscription-first global news provider, committed to delivering journalism worth paying for, and innovative premium advertising experiences equally worth paying for. In a world full of fake news, and low quality commodity digital ads, it’s a distinctive vision – and one which audiences and advertisers around the world responded to in 2016.”
From their fourth quarter 2016 results, I would say that advertisers are somewhat less enthralled with the New York Times than Mr. Thompson would suggest, an issue that could continue to put downward pressure on the Times’ profitability.
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