Meredith Quarterly Earnings Slump

Automotive, retail, movie ads pull down results in TV group.
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Diversified media conglomerate Meredith reported downbeat quarterly earnings Wednesday, which included declines in its broadcasting group with 13 TV stations.

Overall, Meredith posted fully diluted earnings of 41 cents per share for its fourth fiscal quarter ended June 30, less than one-half the $1.05 per share year earlier. Excluding a one-time restructuring charge, the current quarter would have been higher at 76 cents.

Net corporate earnings in the quarter slumped to $19.2 million, way down from $51.5 million a year ago. Fourth-quarter revenue was $385 million, off from $428 million.

The Des Moines, Iowa-based publishing and TV-station conglomerate also lowered its forecast for future earnings for the second straight quarter.

In the TV-station-group segment, operating profit was $19 million in the fourth quarter, declining from $28 million in the same period a year earlier. Fourth-quarter broadcasting revenue was $79 million, off from $84 million a year ago.

For the full fiscal year, TV-segment operating profit was $79 million, down from $107 million. Fiscal-year TV revenue was $319 million, off from $348 million.

The Meredith earnings statement said, “In the first half of the fiscal year (late calendar-year 2007), nonpolitical-advertising revenues increased 4%, driven by growth in online advertising and the categories of professional services and telecommunications. In the second half, a decline in automotive advertising, along with weaker performance in retail and movies, led to a decline in nonpolitical-advertising revenues.”

Meredith president and CEO Stephen Lacy said in a statement about the TV segment, “In fiscal 2008, we increased our emphasis on developing nontraditional sources of revenues such as unique sales initiatives, our station Web sites, retransmission fees and our video-creation business.”

The company commented on its outlook saying that TV advertising is currently trailing a year ago by a percentage in the mid-teens. Meredith expects approximately $20 million-$25 million in one-time political-advertising revenues at its television stations during fiscal 2009, with the majority to be booked in its second fiscal quarter, which is the fourth quarter in the calendar year.

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