The New York Times NYT.N warned on Thursday its robust digital growth may not be sustainable going ahead, easing expectations after reporting a strong quarter that benefited from a news coverage storm around the COVID-19 pandemic and the U.S. election.
The company’s shares fell 5% on the sobering outlook, even as it achieved the key milestone of generating more revenue from digital sign-ups than print subscriptions.
“2020 is an outlier year. So I don’t think you should expect us to get to the same place we are getting in 2020 given the extraordinary nature of the news cycle,” Chief Executive Officer Meredith Kopit Levien said on an earnings call with analysts.
Heightened interest in the U.S. presidential election brought 120 million readers to its digital platform on Wednesday alone and over 75 million the day before, Kopit Levien added.
New York Times said it added 393,000 paid digital-only subscribers during the quarter. Of this, 275,000 subscribed for its digital news product, while the remaining were for its popular cooking, games and audio products.
The paper has focused for years on online subscriptions to offset an industry-wide decline in print readership and fickle advertising revenues.
The media company warned of a 30% decline in advertising revenue in the fourth quarter, but said it expects digital-only subscription revenue to rise about 35%.
Advertising sales have been unpredictable as companies slash budgets to cope with a sharp drop in business due to cronavirus-led lockdowns.
New York Times competes with tech giants like Facebook Inc FB.O and Alphabet Inc’s GOOGL.O Google as well as other national news publishers to attract advertisers.
Total revenue slipped 0.4% to $426.9 million, but came in above analysts’ estimates of $411.8 million, according to Refinitiv data.
Excluding items, the company earned 22 cents per share, beating analysts’ average estimate of 11 cents.