Meredith reports drop in profits
Meredith Corp. announced today that earnings for its fiscal second quarter ended Dec. 31 were 28 cents per share on revenues of $366 million, compared with earnings per share of 75 cents and revenues of $396 million in the year-ago period.
Last quarter’s earnings reflected a special charge of $16 million related to a company-wide workforce reduction of about 250 employees, the closure of Country Home magazine and relocation of ReadyMade and Parents.com creative functions to Des Moines. Without this charge, earnings would have been 49 cents per share.
“Advertising revenues across our businesses continue to be significantly impacted by the recession,” Meredith President and CEO Stephen Lacy said in a release. “However, certain revenue streams not tied to advertising are growing, particularly our integrated marketing, brand licensing and video production activities.”
Second-quarter publishing operating profit was $15 million, compared with $45 million a year ago. Excluding the special charge, the operating profit would have been $28 million. Profits were boosted by a 27 percent increase in Meredith’s brand licensing, including sales of Better Homes and Gardens-branded products at Wal-Mart Stores Inc.
The company’s broadcasting operating profit was $22 million, compared with $28 million a year ago. Excluding the special charge, operating profit would have been $24 million. This division was aided by $17 million in net political revenues.
Meredith generated $83 million in cash flow from operations in the first six months of its fiscal year and reduced debt to $455 million, a $30 million decrease.
“We are well-positioned to weather the current softness in advertising and the turbulence of the financial markets, as well as make acquisitions and investments when opportunities arise,” Lacy said. “We have a strong balance sheet with a low level of debt and continue to exercise prudent cash management.”
However, advertising revenues continue to decline. In its fiscal third quarter, Meredith said, publishing advertising revenues are already down nearly 15 percent, compared with a drop of nearly 20 percent in the first half of its fiscal year. Broadcasting revenues are down nearly 40 percent in this fiscal year.