New York Times warns of ad sales drop after upbeat first-quarter results

The New York Times Co warned of a steep fall in advertising sales in the current quarter after beating Wall Street's profit and revenue estimates on Wednesday, as it added more subscribers in a period dominated by heavy news coverage around the COVID-19 pandemic.

The Times has been focusing on its digital-only subscriptions to stem losses from its print subscription platform as more people shift online for news and to lower its dependency on advertising revenue. First-quarter advertising revenue, which accounts for less than a fourth of total revenue, fell 15.2% to $106.1 million, and the company expects advertising revenue in the current quarter to fall between 50% and 55% from the year-earlier period.

"The Times's business model, 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," Chief Executive Officer Mark Thomson said. The company added 587,000 net new digital subscriptions - the highest quarterly additions in its history - pushing digital-only subscriptions to more than five million.

Of the new digital subscriptions, 468,000 were for its core news product, which currently has more than four million subscriptions. It expects total subscription revenue in the current quarter to increase in the mid- to high-single digits compared with the second quarter of 2019, with digital-only subscription revenue to increase in the high-twenties.

The company's total first-quarter revenue rose 1% to $443.6 million - edging past analysts' estimates of $441.1 million, according to IBES data from Refinitiv. Net income attributable to stockholders rose to $32.9 million or 20 cents per share in the first quarter ended March 29, from $30.2 million or 18 cents per share, a year earlier.

Excluding items, the company earned 17 cents per share beating analysts' estimate of 10 cents.