 |
|
| View previous topic :: View next topic |
| Author |
New York Times (NYT) |
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11740
Location: Los Angeles, California
|
 Posted: Tue Apr 26, 2011 12:30 am Post subject: New York Times (NYT) |
 |
|
Morningstar on NYT's 1Q earnings:
| Quote: | New York Times' Revenue Continues to Slide, Outlook Is More of the Same; Shares Overvalued
Consistent with our thesis, revenue growth continued to elude the New York Times Company NYT because of its reliance on print media (72% of total sales). Management’s outlook was not as surprise--second-quarter advertising revenue is expected to decline similarly to the first quarter. Margins will also be under pressure with increasing newsprint costs. With a few weeks into the inception of the online paywall, the firm is pleased with the number of subscribers, having exceeded 100,000. However, the price tag for the first four weeks is a mere $0.99 (a deal introduced after the paywall went live), and we’re skeptical that many of these subscribers will be retained when the price goes up to $8.75 per week. We're focused on the secular decline of print media and our skepticism on the firm's ability to keep costs in line with a declining revenue base. We still contend the shares are overvalued compared to our $6 per share fair value estimate.
First-quarter revenue dropped 3.6% from the prior-year period due to 4.4% and 3.7% declines in advertising and circulation, respectively. Print media advertising continued to decline sharply, off 7.5%, but was partially offset by a 4.5% rise in digital advertising (weaker than the 11% gain in the fourth quarter). Operating margins were soft, declining 350 basis points from the prior year period to 10.7% from higher newsprint prices and promotion expense. Newsprint expense rose 12.7% in the quarter and is only expected to go higher. We expect margins to contract slightly going forward, however, as we believe any additional cost-cutting will not keep pace with revenue declines. |
|
|
| Back to top |
|
 |
| Author |
New York Times (NYT) Replies |
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16939
Location: Sunny California
|
| Posted: Sat Feb 25, 2012 6:59 am Post subject: |
|
|
The secular decline will be in Morningstar's biggest peccadillo, price of newsprint. They see the iPad as their savior--and I think they're right. 
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11740
Location: Los Angeles, California
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11740
Location: Los Angeles, California
|
| Posted: Wed Dec 28, 2011 7:04 pm Post subject: |
|
|
Morningstar's latest on NYT.
| Quote: | | In its first move since the CEO's departure earlier this month, New York Times NYT announced Tuesday that it will sell its Regional Media Group to Halifax Media Holdings for $143 million. The segment, which made up 12% of revenue, consists of 16 newspapers in Florida, California, Alabama, Louisiana, and the Carolinas and has been a drag on overall results because of its heavier reliance on local advertising, which lags national advertising growth. Advertising revenue declines in the regional segment have averaged 17% over the past four years, compared with 11% and 15%, respectively, for the New York Times and Boston newspaper s. Without these regional newspapers, we view the company as much stronger, as The New York Times newspaper draws a national audience and a high caliber of readers. Management will be able to better focus on the flagship newspaper and monetizing its digital content. Still, we have concerns about the overall success of the firm, given the dependence on print media (roughly three fourths of revenue) as newspaper circulation and newspaper ad spending decline. There is no change to our fair value estimate of $6 per share, as the regional papers were a small part of the firm. We continue to view the shares as overvalued. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11740
Location: Los Angeles, California
|
| Posted: Fri Dec 16, 2011 11:35 pm Post subject: |
|
|
Morningstar on the retirement of the president and CEO--along with an interim firm update.
| Quote: | | New York Times NYT announced Thursday that president and CEO Janet Robinson will retire at year-end and be replaced by chairman of the board Arthur Sulzberger Jr. on an interim basis. Robinson will also resign from the board of directors, but she will be retained by the firm in a consulting capacity for a sweet $4.5 million (roughly a year's compensation). Sulzberger has served as chairman since 1997 and material control has been in the hands of the Ochs-Sulzberger family since 1896. The family owns 19% of New York Times' total equity through a trust. The board's voting structure ensures that the family retains control of the company. There are two separate classes of stock; the family controls 84% of the Class B stock. Class B stockholders vote for 9 out of the 1 3 board members. As such, minority shareholders are unlikely to have material influence on company strategy. Four family members in total are on the board. We will reserve opinion for when a successor is announced, but we hope a new leader can help the firm stem margin erosion due to a falling top line and address our concerns about the firm's pricey digital pay model. We're focused on the continued drop in print advertising revenue even as overall U.S. ad spending rebounds. The shares are slightly overvalued, in our view. With the stock off roughly 80% during Robinson's seven-year tenure (while the S&P was up 4%), we can't say we're too surprised about the departure. Still, peer Gannett's GCI stock is down roughly the same amount over the same period, as the industry is facing secular decline--not quite the fault of a CEO. However, we have consistently highlighted New York Times' lower margins compared with Gannett (even after stripping out Gannett's more profitable broadca sting business), and believed that the firm could be more aggressive with cost-cutting. New York Times has cut costs in an attempt to rightsize the business, but we are not confident that it will be able to keep pace with the decline in revenue over the longer term. Additionally, we have concerns about the firm's digital paid content model, believing that it is too pricey and that the firm and the Street are pricing in assumptions that are way too lofty. Lastly, we were disappointed when New York Times opted to not sell its struggling New England newspapers, as management said the segment was on track. We contend that the issues at the newspapers are not something that can be fixed. The more regional newspapers have a heavier reliance on local advertising, which has seen a steeper decline than national advertising. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11740
Location: Los Angeles, California
|
| Posted: Thu Oct 20, 2011 12:23 pm Post subject: |
|
|
Morningstar on NYT's 3Q earnings:
| Quote: | | Our thesis that print media--still a significant portion of total revenue at 79%--will continue to drag down New York Times' NYT overall growth held true in the third quarter. Total revenue fell 3.1% to $537 million primarily because of a 10.4% decline in print advertising (34% of total revenue), partially offset by a 3.4% rise in circulation revenue (44% of total sales). The launch of the New York Times digital subscription earlier this year has supported this increase, as the pricey online subscription is included with even the lowest level of print subscription. The firm's outlook for the fourth quarter includes a modest improvement in advertising revenue and a continued rise in circulation revenue relative to the third quarter. As our discounted cash flow model encapsulates these assumptions, there is no change to our $6 fair value estimate. For the full year, we anticipate a low-single-digit decline in total revenue. Trading around $7, the shares are moderately overvalued, in our view. We expect the secular long-term decline of print media to more than offset the company's digital media growth initiatives, supporting our skepticism about the firm's ability to keep costs in line with a declining revenue base. Disappointingly, digital advertising revenue was off 4.5%--the first decline in many quarters--because of weakness in the About.com segment, which management attributed to the weak economy. We continue to be skeptical that digital revenue will become a meaningful portion of overall sales. Excluding charges, the operating margin was off 20 basis points to 5.6% as the firm continues to invest in its digital business. Although New York Times does continue to cut costs, we do not believe it will be able to keep costs in check over the long run. We believe the firm will run out of fat to trim amid declining revenue and be faced with the decision to cut into muscle, harming the quality of its product. As such, we expect the company will give back some of the recent margin gains as the growth in costs outpaces revenue growth. For the full year, we forecast a margin drop of more than 100 basis points to around 10%. |
|
|
| Back to top |
|
|
Please log in to view without the ad banners |
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
Powered by phpBB
|
FAQ
Search
Memberlist
Usergroups
Statistics
Register
Profile
Log in to check your private messages
Log in
