Meredith’s National Media Group Profit Jumps Nearly 40 Percent in Q2
Overall, company reports 2-percent net earnings gain through fiscal first half.
Better Homes and Gardens, the 7.6 million circulation behemoth, generated a 7 percent gain in advertising revenue in the fiscal second quarter, which helped propel operating profit at Meredith Corp.’s national media division to $32 million, up almost 40 percent from $23 million during the same period in 2009. Revenues, meanwhile, were $261 million, compared to $277 million last year.
Excluding special charges, the group generated $37 million in operating profit, a 27 percent increase from the same period in 2009.
According to Meredith president and CEO Stephen Lacy, the national media group, which publishes the company’s portfolio of magazines, “continued to gain share, execute multi-platform sales programs and develop its non-advertising based businesses. Additionally, I am particularly pleased with the strong consumer connection metrics we continue to deliver, be it magazine readership, online traffic or the performance of our branded products for sale at retail.”
Advertising revenue for the fiscal second quarter was $117 million, a decline of about 2 percent compared to the same period last year. The group’s operating expenses during the period declined 10 percent, which included a 15 percent decrease in paper prices.
Through the first six months, the group reported an operating profit (including special charges) of $70 million, up from $57 million through the first half of fiscal 2009.
Overall, Meredith Corp. reported $18.95 million in net earnings during the fiscal second quarter, up from $12.54 million last year. Through the first six months, the company reported $37.29 in net earnings a gain of roughly 2 percent from last year.
Revenues in the second quarter were $336.85 million (down about 6 percent) and $669.27 million through the fiscal first half (down almost 8 percent).
Meredith said it generated more than $76 million in cash flow from operations during the first six months of fiscal 2010. As of December 31, it carried a total debt of $350 million, down $30 million from the same time the prior year. Meredith’s debt-to-EBITDA ratio was 1.7 to 1, it said.
Last week, Meredith announced plans to scale back production of its special interest publications within its Special Interest Media division by 40 percent, produce 90 SIPs in its fiscal 2011, down from 150 in fiscal 2010. Meredith said it will record a special charge of $5.5 million in its fiscal 2010 second quarter and that approximately 45 positions will be eliminated.