Reader’s Digest, Meredith, McGraw-Hill Report Earnings
Two major publishing companies have released their earnings for the third quarter of this year, while another posted first quarter 2007 results.
The Reader’s Digest Company, publisher of the same-named magazine, reported a loss of $26.7 million, or 29 cents per share for the quarter, compared to a loss of $8.2 million, or 9 cents per share, during the same period last year.
Quarterly revenue were basically flat with a 0.1 percent increase to $517.1 million versus $516.4 million a year ago. Revenue for Reader’s Digest North America increased 1 percent and Reader’s Digest International was up 3 percent.
“Much of the decline reflects a planned shift in timing and mix of customer-acquisition- related marketing activities and increased investment spending on new initiatives including Every Day with Rachael Ray, Daheim in Deutschland and Taste of Home Entertaining. These new initiatives collectively will contribute substantial revenues in fiscal 2007,” President and Chief Executive Eric Schrier said in a statement.
Business Week publisher, the McGraw-Hill Companies reported last week that it cut 600 positions in third quarter of this year, due to the integration of its elementary and secondary basal publishing operations and the outsourcing of some information technology functions, the company said in its quarterly earnings news release.
The company took a $15.4 million pre-tax restructuring charge ($9.7 million after tax) in its third earnings due to employee severance costs, the company said in the earnings release. Revenues for the third quarter were $2 billion, up 0.8 percent from the same period in 2005. The company’s net income increased 0.3 percent for the quarter to $382.8 million, from a year earlier, while its earnings per share increased 6 percent to $1.06, according to a news release from the company.
“Total restructuring charges for 2006 will be approximately $31.4 million, or $0.06 per diluted share, primarily from the elimination of 700 positions,” said CEO Harold McGraw III, in a statement. “These actions further streamline the organization and position us for a return to double-digit earnings growth in 2007.”
Meredith Corporation, publisher of Better Homes and Gardens and Family Circle, announced that its net earnings for the first quarter of 2007 grew 15.4 percent to $30.5 million. The company’s consolidated revenues were $395.7 million, while advertising revenues were up 5.3 percent, driven by strong performance at its television stations.
The company reported that its publishing operating profit increased to $48.5 million, due to advertising revenue growth and expense management, partially offset by additional circulation investment.
Publishing revenues were $313.7 million. Publishing advertising revenues grew 1.3 percent, led by growth in Family Circle and More, partially offset by industry-wide weakness in the parenthood category. Publishing costs declined 2 percent, despite a 5 percent increase in postal rates, the company said. Family Circle advertising revenues were up nearly 20 percent compared to the prior year quarter, the company said in a statement.