Primedia Earnings: Revenue, EBITDA Up Slightly, Net Income Declines Sharply
Primedia Tuesday released its third quarter earnings noting that while its revenue and EBITDA climbed slightly, net income nose-dived sharply. The company also lowered its 2006 guidance citing a "worse than expected 2006 selling season" in its Channel One public schools television network.
The sharp decrease in net income for the third quarter, $53.8 milllion compared to $207.8 million a year ago, was attributed to gains the company had in the third quarter of last year due to the sale of About Inc. and its Business Information segment.
The company posted total revenues of $254 million for the third quarter, compared to $246 million in the same period a year ago, a 2.9 percent increase. Total revenues-to-date are up 2.4 percent to $752 million from $734.3 million in the first nine months of last year. The company reported slight increases in revenues in its consumer and enthusiast groups, and a 15.8 percent decline in revenues from its education group.
Total segment EBITDA was $46.5 million for quarter, up from $42.2 million last year, a gain of 10.2 percent. Segment EBITDA for the first nine months of the year is down 3.2 percent to $122.3 million, compared to $126.3 in the first nine months of last year.
The Motor Trend publisher expects to deliver total-year earnings results of low single-digit percentage revenue growth and flat segment EBITDA growth, both lower than previous guidance of mid-single digit revenue growth and low-to-mid single digit percentage EBITDA growth.
Consumer Guides Spin-off
Primedia Monday filed with the SEC to spin off its consumer guides division – home to Apartment Guide, Auto Guide and other free publications — into a separate company called Consumer Source. The spin-off was announced last year by the company and was to take effect in the third quarter of this year, but was delayed.
The move, Primedia has said, would enhance shareholder value. Primedia didn’t announce when the spin-off would actually occur, but said the new company would be traded on the New York Stock Exchange.