New York Times Jumps On Guidance Hike Days After Bullish 'Zingernation' Call

New York Times Co NYT shares rallied 6.8% on Wednesday after the company filed an 8-K form suggesting its fourth-quarter advertising numbers won’t be as bad as the company previously expected.

What Happened? In the New York Times’ third-quarter earnings report, the company warned that fourth-quarter advertising revenue was expected to decline “approximately 30 percent” from a year ago. However, the new 8-K filing reveals updated guidance of a total advertising revenue decline of “approximately 20 percent.”

Why It’s Important: In the third quarter, the New York Times reported a 0.4% drop in revenue but a 12.6% increase in subscription revenue. Advertising revenue for the quarter was down 30.2% from a year ago.

The company initially guided for another 30% drop in the fourth quarter, but the updated guidance of just a 20% drop suggests the landscape has significantly improved compared to the third quarter.

Wednesday’s guidance hike may have taken the market by surprise, but it certainly didn’t take Benzinga’s Luke Jacobi by surprise. He made a bullish call on New York Times back on Dec. 4 on Benzinga’s Zingernation Power Hour.

“The insight that I have on New York Times right now is that our traffic at Benzinga has exploded over the past month or so as we’ve started to lock down again,” Jacobi said.

“I’ve talked to other publishers, and a lot of folks are seeing this trend where, as schools are shutting down again, as jobs are going back to remote and that sort of thing, they are seeing traffic rise. New York Times is your pure-play public company stock to get in on that trend.”

Benzinga’s Take: Legacy media companies like the New York Times may still have an uphill battle ahead competing online for advertising dollars with a wave of new competition. However, in the short-term, the company may continue to be a lockdown winner as the U.S. gets deeper into flu season.

The stock trades around $49.07 at publication time.