Meredith Profits Up, Revenues Down in 4Q

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Meredith Corp. reported an increase in profits in the fourth quarter of 2009 compared to the same period in 2008, with earnings per share rising 50% from $0.28 to $0.42, even as total revenues fell 6.5% from $361 million to $337 million.

The rise in earnings was attributed by Meredith President and CEO Stephen M. Lacy to a higher profit in its national magazine publishing business ($32 million, up from $23 million last year) and companywide cost reductions of 8%.

Mirroring the company's overall performance, magazine publishing saw profits increase, despite a 5.8% decrease in revenues from $277 million to $261 million. The company also enjoyed double-digit percentage increases in new revenue areas like brand licensing, retransmission fees and video content creation.

Despite the decrease in revenues, there was some good news in magazine publishing: Total ad revenues at flagship Better Homes and Gardens increased 7% in the quarter, while More and Fitness were also up.

In fact, because of declines in the rest of the magazine industry, Meredith's share of total magazine ad revenues increased from 9.4% to 11.7% in the final quarter, according to official rate card data from the Publishers Information Bureau. Meredith also reported an uptick in readership, per audience measurements from Mediamark Research and Intelligence, while monthly unique visitors to its magazine Web sites increased 35% compared to the previous year, to over 20 million.

Separately, Meredith's local media division, encompassing its broadcast properties, also saw total revenues decline, with a 9.5% drop from $84 million to $76 million.

This decrease was attributed to a $14 million drop in political ad revenues that was only partially offset by a 4% increase in non-political advertising. As a result, the division's operating profits fell 23%, from $22 million to $17 million.

The relatively modest 6.5% decline in Meredith's total revenues suggest that its business may finally be stabilizing after a year of steep losses, which began before most other big publishers.

In 2008, Meredith saw revenues decline 1% in the first quarter of 2008, 11% in the second quarter, 8.5% in the third, and 7.5% in the fourth, followed in 2009 by declines of 14% in the first quarter, 8% in the second quarter and 9% in the third quarter.

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