Shares of The New York Times (NYT) are up 35 cents, or 5.4%, at $6.87, after the company this morning slightly missed Q3 revenue expectations but beat by a penny on the bottom line.
The Times said it ended the quarter with 324,000 paying subscribers to its Times digital edition “package,” and various e-reader subscription options, combined. That’s an increase of 15% from the 281,000 the company recorded at the end of Q2.
Revenue in the three months ended in September fell 3.1%, year over year, to $537 million, yielding 5 cents a share in profit, excluding some costs. Analysts had been modeling $543 million and 4 cents.
Ad revenue dropped 8.8% but circulation rose 3.4%, with print ad revenue was down 10.4%, while digital revenue rose 4.5%. Circulation revenue was boosted by new subscribers to the Times’s digital edition.
Operating costs fell 3.6% to $504 million.
The company said its circulation revenue will rise “in the low to mid single digits” this quarter, while operating costs will decline by the same percentage.
In a note to clients shortly after the results, Citigroup’s Leo Kulp, who rates the shares a Buy, writes that costs were better than expected, and that the 100,000 additional payday subscribers was fewer than the 125,000 he was expecting, but probably more than the Street was looking for.
The circulation outlook, moreover, is not what he would have hoped for the current quarter, though costs decline is better than he’d hoped for.
Kulp reiterates a $7 price target on the stock.
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