The New York Times Co on Thursday reported better-than-expected profit and revenue on a surging digital subscriber base and said it would raise prices for some digital plans for the first time in nine years, sending its shares to a 15-year high.
The publisher launched digital-only subscriptions in 2011 to stem a decline in sales for its broadsheets and added 342,000 digital-only subscribers to take the total tally to 4.4 million in the fourth quarter, as revenue from the segment jumped 16%.
The 169-year-old newspaper said 750,000 subscribers would be hit by the end of the year with the price raise.
Evercore analysts estimated that a $2 price rise a month would lead to customers paying $4.25 per week from $3.75.
The Times, which has seen a decline in digital advertising revenue for three straight quarters, said it expects the revenue to return to year-over-year growth in the second half of 2020, which is an election year in the United States. The New York Times saw a surge in the number of subscribers during the last election in 2016 in what was known as the “Trump bump” – the effect of U.S. President Donald Trump’s attacks on the paper as well as the Times’ coverage of his administration.
The company expects digital subscription revenue to increase in the high teens for the current quarter in the run up to the election scheduled for November.
“First quarter guidance for high-teens digital-only subscription revenue growth suggests pricing trends are heading in the right direction,” Evercore analysts wrote in a client note.
The company’s total revenue rose 1% to $508.4 million in the quarter ended Dec. 31, beating analysts’ estimates of $503.7 million, according to IBES data from Refinitiv.
However, digital advertising revenue, which accounts for more than half of the company’s total advertising revenue, declined 10.8% to $92.2 million, hurt by a drop in display advertising.
Net income attributable to stockholders rose 24% to $68.2 million, or 41 cents per share.
Excluding items, the company earned 43 cents per share, beating analysts’ estimates of 29 cents.
Shares of the company rose as much as 13% to $38.30.