The media company owned by Westport’s Martha Stewart—Martha Stewart Living Omnimedia Inc.—reported lower fourth quarter earnings today. It cited declining magazine advertising revenues and softness in its television division.
Stewart, who is scheduled to be released March 6 from a prison in West Virginia, will return to the New York-based multimedia company as it warned that losses for the first quarter will be larger than what analysts expected.
Stewart, who owns about 60 percent of the company’s shares, will be allowed to work at the firm while serving five months house arrest at her home in Bedford, N.Y.
Martha Stewart Living said it lost $7.33 million, or 15 cents per share, in the three months ended Dec. 31, 2004, compared with a profit of $2.37 million, or 5 cents per share, in the year-ago period.
Analysts surveyed by Thomson First Call expected a loss of 17 cents.
Total revenues fell 15 percent to $60.21 million, from $70.86 million a year ago.
“2004 was a year of significant challenge for MSO, and we look at the coming year with both realistic expectations and optimism for the future,” said Susan Lyne, president and chief executive. She replaced Sharon Patrick in a management shakeup in November.
“We will focus our efforts on our greatest assets: the Martha Stewart brand, our content and our creative capabilities,” she added in a statement.
In the company’s fourth quarter, magazine revenues were $26.1 million, compared with $33.1 million in the year-ago period.
The results primarily reflect a decline in advertising revenue in Martha Stewart Living, as well as subscription acquisition spending For Everyday Food magazine, and losses related to Body & Soul magazine, which was acquired in August 2004.
The decline in advertising revenue from Martha Stewart Living magazine was due to both a reduction in advertising pages as well as lower advertising rates due to the rate base reduction effective with the January 2004 issue.
Circulation revenue declined in the quarter due primarily to lower subscription revenues from Martha Stewart Living, as fewer subscription copies sold.
Television revenues were $1.1 million, compared with $5.9 million in the year-ago period. The decline in revenue was due principally to the absence of the company’s daily syndicated show, which stopped airing in mid-September, as well as the expiration of certain cable television agreements.
The company said it will begin production of the newly revised syndicated show, to be distributed by NBC Universal Domestic Television Distribution, in the second quarter of 2005.
Merchandising revenues were $23.7 million, compared with $22.5 million in the year-ago period. The higher revenue is due in part to an increase in revenue from Kmart Holding Corp. resulting from contractual minimum royalty guarantees.
Revenues at the Internet/Direct Commerce division were $9.3 million, compared with $9.4 million in the year-ago period. The results reflect the company’s efforts at selling its remaining catalog-related inventory, while continuing to expand its profitable flowers business.
Overall, Martha Stewart Living expects to post a loss of 35 cents in the first quarter. Analysts polled projected a 20-cent loss.
In the year ended Dec. 31, the company lost $59.60 million, or $1.20 per share, compared with a loss of $2.77 million, or 6 cents per share, a year ago.
Total revenues reached $187.44 million, down 24 percent from $245.85 million in 2003. The company lost $59.60 million, or $1.20 per share, compared with a loss of $2.77 million, or 6 cents per share, a year ago. Total revenues reached $187.44 million, down 24 percent from $245.85 million in 2003.
