The New York Times Company (NYSE:NYT) Q2 2019 Earnings Conference Call Transcript

Aug 07, 2019 • 11:00 am ET

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The New York Times Company (NYSE:NYT) Q2 2019 Earnings Conference Call Transcript

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Presentation
Executive
Roland A. Caputo

to $45 million, principally driven by the premiere of our television series, The Weekly, which debuted on June 2nd and from our commercial printing operations which has not yet achieved full scale at this point last year.

GAAP operating costs and adjusted operating costs each increased approximately 7% in the quarter, as a result of increased content costs, reflecting both higher staffing in the newsroom as well as production costs related to The Weekly. Expenses associated with our growth in the commercial printing business and higher advertising also drove the increase. Our effective tax rate for the quarter was 27%. On a going forward basis, we expect our tax rate to be approximately 26% on every dollar of marginal income we record. Due in large part to a tax benefit we received in the first quarter of 2019, we now expect the effective tax rate for full year 2019 to be between the high teens and low '20s.

Moving to the balance sheet, our cash and marketable securities balance increased during the quarter, ending at $847 million. Total debt and finance lease obligations, principally related to the sale leaseback of our headquarters building, which we expect will be repaid in December 2019 were approximately $254 million. Let me conclude with our outlook for the third quarter of 2019. Total subscription revenues are expected to increase in the low to mid single digits compared with the third quarter of 2018, with digital-only subscription revenue expected to increase in the mid-teens. Overall advertising revenues and digital advertising revenues are expected to decrease in the high single digits compared with the third quarter of 2018.

Other revenues are expected to increase approximately 25% to 30%, largely due to our television series, The Weekly. Both operating costs and adjusted operating costs are expected to increase in the high single digits compared with the third quarter of 2018, as we continue to invest in the drivers of digital subscription growth. And with that, we'd be happy to open it up for questions.