Meredith Earnings Down 44 Percent
Continued advertising declines; $16 million workforce reduction charge.
Meredith Corp. incurred a $16 million special charge in the fiscal second quarter of 2009 associated with reducing its overall workforce by approximately 250 people, the closing of Country Home magazine and relocating its Parents.com and ReadyMade operations to its headquarters in Des Moines, Iowa, the company said today.
After factoring the special charge, Meredith reported net earnings of $31.1 million through the first six months of fiscal 2009, down 44 percent from $69.4 million from the same period last year. Revenue for the period was $736.6 million, compared to $800.3 million during the same period in fiscal 2008
Operating profit in the publishing division declined nearly 50 percent to $48 million through the first six months, compared to $100 million during the same period last year (excluding the special charge, operating profit would have been $61 million, the company said). Advertising revenues were down to $271 million compared to $333 million from the same period the prior year.
According to Meredith president and CEO Stephen M. Lacy, ad revenues company-wide continue to be “significantly impacted by the recession. However, certain revenue streams not tied to advertising are growing, particularly our integrated marketing, brand licensing and video production activities.”
Despite the special charge and higher paper prices, Meredith’s total operating expenses declined 2.8 through the first six months of fiscal 2009, the company said.
Looking ahead to fiscal third quarter 2009, Meredith says declining ad revenue will continue to affect its businesses. Publishing ad revenue for the third quarter is down 15 percent, compared to a decline of 20 percent through the first six months. Ad revenue in its broadcasting group is down nearly 40 percent, driven mostly by a 70 percent decline in advertising from the automotive segment.
“We possess a strong balance sheet, modest levels of debt at a low cost of funds and adequate liquidity supported by strong operating cash flow,” Lacy said.