Investors sent shares of the New York Times tumbling on Wednesday after the company revealed subscription growth slowed once Donald Trump left the White House.
The 170 year-old publication, which has seen subscriber growth skyrocket since Trump was elected in 2016, said it added 301,000 new digital subscribers in the first quarter, its lowest gain since the third quarter of 2019.
Wall Street, which had predicted 361,000 new subscribers for the period that ended in March, sent the stock tumbling as much as 5 percent in early trading. Shares of the Gray Lady closed down Wednesday 3.75 percent to $43.17 a share.
Of the new digital subscribers, 167,000 came from the news side, down from expectations for 225,000 new readers. The publication’s cooking, games and podcasts side added 134,000, also lower than Wall Street’s forecast of 145,000. The company is now reporting 7.82 million total digital and print subscribers.
“In February and March, our audiences declined from their historic highs last year, and we saw fewer net subscription additions in the latter part of the quarter,” president and CEO Meredith Kopit Levien said. She forecast subscriber growth will continue to slow in the second quarter.
“We expect moderated growth to continue through the second quarter, traditionally our softest of the year. With lower forecasted second quarter performance, we now expect annual total net subscription additions to be in the range of our 2019 performance, which, prior to 2020, was our best year for net additions,” she said.
The slowed growth overshadowed revenue growth of 6.6 percent to $473 million. Operating profit surged 89 percent to $51.7 million.
Of the $329.1 million in quarterly subscription sales, digital kicked in $179.6 million compared to only $149.5 million from print, the company said. Advertising sales continued to slump, however, down 8.5 percent to $97.1 million with digital contributing $59.5 million and print contributing only $37.6 million.
Despite the stock hiccup, Doug Arthur at Huber Research still sees upside with a $56 a share price.
“Total news only subs were 34.9 percent higher than a year ago. The ecosystem is still growing and NYT’s long term, 2025 goal of achieving 10 million in total subs will likely be achieved significantly earlier than expected or mid-2024 by our estimate,” Arthur said.
He said he expects total 2021 revenue to increase 10.3 percent.