Zacks_Analysts' Blog : Earning Preview: New York Times - Analyst Blog

The New York Times Company (NYT), the publisher of The New York Times, the International Herald Tribune and The Boston Globe, is scheduled to report its fourth-quarter 2011 financial results on Thursday, February 2, 2012. The current Zacks Consensus Estimate for the quarter is 42 cents a share. The Zacks Consensus estimates revenue at $647 million for the quarter.

Third-Quarter 2011, a Synopsis

The New York Times Company, which faces stiff competition from News Corporation (NWSA), posted better-than-expected third-quarter 2011 results. The quarterly earnings of 5 cents a share beat the Zacks Consensus Estimate of 3 cents, but dropped 28.6% from 7 cents earned in the prior-year quarter.

On a reported basis, including one-time items, the company posted quarterly earnings of 10 cents a share compared with a loss of 3 cents delivered in the year-ago quarter.

The New York Times Company’s top-line fell at an accelerating rate. After declining 2.2% in the second quarter, total revenue slipped 3.1% to $537.2 million in the quarter compared with the prior-year quarter, and also fell short of the Zacks Consensus Estimate of $545 million

Fourth-Quarter 2011 Zacks Consensus

The analysts considered by Zacks, expects the company to post fourth-quarter 2011 earnings of 42 cents per share. The current Zacks Consensus Estimate reflects a decline of 8.7% from the prior-year quarter’s earnings. The current Zacks Consensus Estimate for the quarter ranges between 40 cents and 44 cents.

Zacks Agreement & Magnitude                 

Of the 5 analysts covering the stock, 1 analyst revised the estimates upwards in the last 30 days, while none of the analysts revised the same in the downward direction. Thus, the Zacks Consensus Estimate inched up by a penny over the last 30 days.

In the last 7 days, none of the analysts revised their estimates either in the upward or downward direction, keeping the Zacks Consensus Estimate stable.

Mixed Earnings Surprise History

With respect to earnings surprises, The New York Times Company has topped as well as missed the Zacks Consensus Estimate over the last four quarters in the range of negative 33.3% to positive 66.7%. The average remained at positive 22.2%, indicating that the company has outperformed the Zacks Consensus Estimate by an average of 22.2% in the trailing four quarters.

What Drives Estimate Revision

Waning print advertising revenue, in an economy in turmoil, compelled The New York Times Company to divest Regional Media Group, part of The New York Times Media Group. This move facilitated the company to re-focus on its core newspapers and pay more attention to its online activities.

Moreover, the decision to offload the division is also considered as a part of the cost containment efforts undertaken by the company to stay afloat in this turbulent environment.

The New York Times Company remains committed to streamlining its cost structure, strengthening its balance sheet and rebalancing its portfolio. Currently, we have a long-term Neutral rating on The New York Times Company. Moreover, considering the fundamentals, we prefer to have a short-term Buy recommendation on the stock, which is well defined by Zacks #2 Rank.