Martha Stewart Acknowledges the Obvious: Stock Probe Hurt Earnings
Westporter Martha Stewarts media company says it had a much wider net loss and 15 percent lower revenue for its first quarter and that it was hurt by the government’s insider trading investigation of her.
Martha Stewart Living Omnimedia Inc., which produces magazines, TV programs and merchandise, reported a loss of $4.51 million, or 9 cents per share, compared with a loss of $234,000, or break-even on a per share basis, in the year-ago period.
The 2002 first-quarter results include a charge of $3.14 million, or 6 cents a share, related to an accounting rule change.
Its operating loss was $7.5 million, or 9 cents per share. Analysts surveyed by Thomson First Call expected a loss of 6 cents per share. Revenues declined to $58 million from $68 million for the year-ago period.
“Our business results reflect considerable pressure associated with the continuing governmental investigations of my sale of noncompany stock,” Stewart said in a statement.
“In the face of these pressures, the company nonetheless remains focused on creating and producing the original how-to content and quality products that fuel our company and define our brand.”
Prosecutors have been investigating whether Stewart and a Merrill Lynch & Co. Inc. broker violated insider-trading laws in the December 2001 sale of ImClone Systems Inc. stock. No charges have been filed against Stewart, and she has denied wrongdoing.
Stewart said the companyҒs recent ideas and products include the new digest-sized Everyday Food magazine and our recently launched Martha Stewart Signature furniture collection, both of which are experiencing early strong consumer response.Ӕ