(Reuters) – The New York Times Co (NYT.N) crossed five million digital subscribers, adding a record number and withstanding a heavy drop in ad revenue in the first quarter that was dominated by heavy news coverage around the COVID-19 pandemic.
Shares of the publisher, which beat quarterly profit and revenue estimates, were up 6% in afternoon trading.
The media company, which gets nearly two-thirds of its revenue from subscriptions, said on Wednesday it expects revenue from digital subscriptions to increase in the high-twenties in the second quarter.
The company added 587,000 net new digital subscriptions in the reported quarter. Of the additions, 468,000 were for its core news product, which has more than four million subscriptions.
“The business model, with its growing focus on digital subscription growth and diminishing reliance on advertising, is very well positioned to ride out this storm and thrive in a post-pandemic world,” Chief Executive Officer Mark Thompson said.
The Times has focused on online for several years to stem losses from its print subscription platform and to lower its dependence on ad revenue.
Advertising sales have been unpredictable and the sector is one of the hardest hit as companies slashed ad budgets to save cash and buffer the sharp drop in business due to global lockdowns.
The publisher said it expects advertising revenue in the current quarter to slide between 50% and 55% from a year earlier. Advertising revenue in the first quarter fell 15% to $106.1 million.
“Many investors anticipated that the company would not provide updated advertising guidance, and doing so should at least remove some uncertainty about forecasting the rest of 2020,” Evercore analysts said.
Chief Operating Officer Meredith Kopit Levien told Reuters that advertising revenue from categories like luxury, travel and real estate were more pressured than others.
Meanwhile, podcast revenue for the company rose 30% in the quarter, boosted by its popular show “The Daily”.
“We have been investing a lot in a smaller number of growing categories like tech and telecom where we have very unique collaborations and that is holding up better,” Levien said.
On a conference call, CEO Thompson signaled cost cuts leading to job losses in the coming months, but said it would be a comparatively small number with no job reduction in journalism.
The company’s first-quarter revenue rose 1% to $443.6 million, edging past market expectations of $441.1 million, according to IBES data from Refinitiv.
Excluding items, it earned 17 cents per share, beating analysts’ average estimate of 10 cents.