New York Times reports better-than-expected profit and revenue

(Reuters) - The New York Times Co NYT.N reported better-than-expected fourth-quarter profit and revenue on Thursday as it cut costs while continuing its push into digital content.

A woman exits the New York Times Building in New York August 14, 2013. REUTERS/Brendan McDermid

However, Chief Executive Mark Thompson said stepped-up investment in digital in 2016 - “an investment year” - will put downward pressure on operating profit, with growth resuming as the publisher heads into 2017.

Investments will range from conventional video to expanding virtual reality capabilities, Thompson said.

The Times hopes to end the year with “a million an a quarter digital-only subscribers” compared with about 1.1 million now, Thomson said on a conference call with analysts.

The company, whose shares were up 2 percent at midday, said in October it was aiming to double annual digital revenue to $800 million by 2020, with a focus on smartphone users.

The Times, facing diminishing revenue from print advertising, has been trying to popularize its digital content globally by investing in marketing and taking steps such as allowing subscribers to pay in local currencies.

As part of its drive to push its digital content, the Times distributed more than a million Google Cardboard headsets to home delivery subscribers during the quarter to allow them to view its virtual reality application and films.

The Times said it expected operating costs to rise by a low single-digit percentage in the current quarter as it adds a net 50,000 digital subscribers.

The company’s digital advertising revenue increased 10.6 percent to $69.9 million in the fourth quarter, compared with a year earlier, while circulation revenue from digital-only subscription products rose 13.3 pct to $50.4 million.

The Times added 53,000 paid subscribers to its digital-only subscription products in the period. The company did not provide details of print advertising revenue or circulation in the quarter but said its print advertising revenue fell 6.6 percent.

Net income attributable to shareholders from continuing operations rose to $51.7 million, or 31 cents per share, from $34.9 million, or 22 cents per share.

Excluding items, the company earned 37 cents per share, beating the average estimate of 30 cents, according to Thomson Reuters I/B/E/S.

Total revenue was flat at $444.7 million but exceeded the average analyst estimate of $439.6 million.

Operating costs fell 7.7 percent to $352.7 million, the fourth quarter in a row that expenses have fallen.

Up to Wednesday’s close of $12.77, the company’s shares had fallen about 7 percent in the past 12 months.

Reporting By Arathy S Nair in Bengaluru; Editing by Ted Kerr