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Profits Decline at Time Inc., Meredith

Ad losses impact publishers’ bottom lines; Meredith sees slight uptick.



By Jason Fell
04/29/2009

The proof that magazine publishing took a beating through the first three months of 2009 continues to trickle out. Profits for the period were down at Time Inc. and women’s magazine publisher Meredith Corp.

Operating income at Time Warner’s publishing division, Time Inc., plummeted 92 percent to $12 million through the end of March, according to the company’s first quarter earnings statement released today. The division reported an operating loss of $32 million, down from a $93 million gain during the same period last year.

The company attributed its publishing division losses to a 30 percent decline in advertising revenue, a 16 percent decline in subscription revenue and an 18 percent decline in other revenues. The division also incurred an $18 million increase in bad debt reserves related to the closing of wholesaler Anderson News.

Time Warner—which spun-off its stake in Time Warner Cable last month—reported an overall operating profit of $1.19 billion, down about 8 percent from the same period last year. Its AOL segment saw operating income fall 47 percent to $150 million and revenue fall 23 percent to $867 million.

Advertising Revenue Uptick

Meanwhile, Meredith’s operating income through the first nine months was $117.4 million—down significantly from $202.9 million during the same period last year, according to the company’s fiscal third quarter earnings report released today. The publishing division reported $105 million in profit on $851 million in revenue, compared to $164 million in profit on $936 million in revenue during the prior year period.

The publishing division’s fiscal third quarter profits were $48 million, down about 25 percent from $64 million during its third quarter last year.

On the bright side, Meredith said publishing division advertising revenues improved, declining 12 percent during the period. Second quarter ad revenues were $122 million, down more than 20 percent compared to the prior-year period. Ad revenues through the fiscal first half were $271 million, a decline of more than 18 percent.

"We are seeing stabilization and some improvement in magazine advertising compared to the first half of fiscal 2009," Meredith president and CEO Stephen M. Lacy said in a statement. “We expect this trend to continue into the fourth quarter as well."

Meredith Interactive Media advertising revenues increased 7 percent during the third quarter, the company said. Monthly unique visitors increased to about 15 million and page views per month averaged nearly 170 million—an increase of 25 percent.

By Jason Fell
04/29/2009




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