The media company owned by Westport’s Martha Stewart, Martha Stewart Living Omnimedia Inc., posted a wider loss in the third quarter than a year ago amid declining advertising revenues, it was announced today.
The results beat Wall Street expectations, but the company warned of a wider loss in the fourth quarter than Wall Street anticipated.
The announcement came as Stewart was about to enter the third week of her five-month prison sentence at Alderson, W. Va., for lying about a stock sale.
Martha Stewart Living posted a loss of $14.97 million, or 30 cents per share, during the three-month period ended Sept. 30. That compared with a loss of $3.94 million, or 8 cents per share, in the year-ago period.
Analysts surveyed by Thomson First Call expected a loss of 47 cents per share.
Revenue dropped 24.4 percent to $38.69 million, down from $51.18 million a year ago.
Stewart, the founding editorial director who was convicted in March of lying to investigators about her sale of ImClone Systems Inc., shares, was sentenced July 16 to five months in prison and five months of house arrest.
She began serving her sentence Oct. 8 at the Alderson Federal Prison Camp.
Last week, Stewart’s lawyers filed an appeal, claiming that her trial was tainted by “a barrage” of unfair suggestions that she was charged with insider trading.
“Despite the losses in the quarter, we continue to benefit from strong consumer support for our products, which offer that unique blend of ‘Martha Stewart’ brand attributes – inspiration ‘how-to’ ideas translated into products that stand for quality, style, usefulness and affordability,” said Sharon L. Patrick, president and chief executive officer, in a statement.
Patrick noted that the company is becoming “increasingly more optimistic” about the prospects for an advertising recovery in 2005.
Last month, Martha Stewart Living signed a consulting agreement with reality show producer Mark Burnett to refashion the namesake founder’s lifestyle television show and collaborate on other television projects. The agreement also includes the development and production of a prime-time network television series featuring Stewart.
In the company’s third quarter, revenues in the publishing division were $22.3 million, compared with $29.15 million in the year-ago period.
Television revenues were $2.2 million, compared with $6.6 million in the year-ago period. And in merchandising, revenues were down to $8 million, compared with $8.9 million a year ago. The decline in revenue was a result of lower sales of Martha Stewart Everyday products at Kmart Holding Corp.
Revenues at the Internet/Direct Commerce division were $6.2 million, compared with $6.6 million in the year-ago period.
Martha Stewart Living warned that losses in the fourth quarter could be 20 cents a share. Analysts surveyed by Thomson First Call expected a loss of 7 cents per share.
For the first nine months of the year, Martha Stewart Living lost $52.27 million, or $1.05 per share, compared with a loss of $5.14 million, or 10 cents per share, a year ago. Revenues were $127.23 million in the period, compared with $174.99 million in the year-ago period.
