Time Warner released its 4Q and full-year 2012 financials today and the numbers give a peek at the what motivated Time Inc. CEO Laura Lang to cut 6 percent of the publishing division’s global work force. Topline for Time Inc. was down 6.5 percent for the year to $3.4 billion and operating income tumbled 25 percent to $420 million.
In the fourth quarter, revenues were down 7 percent and operating income dipped 3 percent.
In his remarks in the report, Time Warner CEO Jeff Bewkes noted Time Inc. still managed to increase its market share, based on PIB numbers, by about a half percentage point to 21.5 percent.
Of the $241 million drop in revenues for the year, ad revenues dipped $104 million in 2012 and subscription revenues fell 5 percent, or $61 million.
"Other" revenues fell 21 percent for the year, or $83 million, mainly attributable to the absence of the QSP fundraising business, which was sold in early 2012.
While the advertising drop, as most publishers can attest to, was due to weak demand for magazine display marketing, the subscription revenue decrease is being primarily pinned on decreasing newsstand sales.
The subscription revenue gap widened last year, it dipped—again because of the newsstand—2 percent in 2011. Nevertheless, in its earnings call, CFO John Martin noted that subsription revenues were flat in the fourth quarter and the ad revenue drop in that quarter was the smallest for the year. "The fourth quarter showed some signs of improvement," he said.
For its 2013 outlook, Martin noted that Time Inc. will take a $60 million restructuring charge related to the six percent workforce reduction. The impact will occur in the first quarter.