Martha, WaPo Report Year-End Profit Declines
Publishers affected by plummeting ad revenues; WaPo income drops 77 percent.
Martha Stewart Living Omnimedia and the Washington Post Company today reported year-end profit declines for 2008.
The decline was more severe at Newsweek publisher the Washington Post Company, which reported a year-end net income of $65.7 million in 2008, down more than 77 percent from $288.6 million in 2007. Fourth quarter profits were down to $18.8 million, compared to $82.9 million during the same period in 2007.
Meanwhile, year-end revenues were $4.46 billion, up 7 percent from $4.18 billion in 2007. The company attributed the massive income slide to “several unusual or one-time” charges, including $142.3 million in goodwill and other impairment charges and $111.1 million related to early retirement expenses at the Washington Post newspaper and Newsweek.
WPC’s magazine division reported 2008 an operating loss of $16.1 million in 2008, compared to an income of $31.4 million in 2007. Revenue declined 13 percent to $250.9 million. Year-end advertising revenues at Newsweek were down 14 percent as a result of fewer ad pages and lower rates due to rate base reductions, the company said. Newsweek previously said it would cut rate base from 3.1 million to 2.6 million. Earlier this month, it said it would scale back further to 1.5 million by 2010.
The company’s newspaper division also took a significant hit in 2008, reporting a $192.7 million operating loss, compared to $66.4 million in income in 2007.
Publishing Declines, Online Gains
MSLO reported an operating loss of $10.8 million in 2008, compared to a $7.7 million income for 2007. The company’s year-end revenues were $284.3 million, down more than 13 percent from $327.9 million the prior year. The company attributed the losses, in part, to the termination of contractual minimums with its once-main retailer K-Mart and the loss of revenue from Blueprint magazine, which it shuttered in late 2007.
Adjusted year-end EBITDA was $15 million, down from $34.4 million in 2007, the company said.
Its publishing segment, which includes a books division, reported a $4.5 million operating loss for the fourth quarter 2008, down from a $1.1 million loss during the same period in 2007. Fourth quarter revenues were $41.9 million, down slightly from $49.4 million in 2007. Lower advertising pages, and the absence of Blueprint, were partially offset by advertising rate gains at its remaining publications, the company said.
Publishing losses were also offset by gains in the company’s Internet division, which saw digital ad revenue increase 11 percent year-over-year. In the fourth quarter, the division reported $900,000 in operating income on $5.9 million in revenue.