• by Erik Sass  @eriksass1, August 3, 2006

Time Warner CEO Dick Parsons admits that Time Inc.'s second-quarter returns were poor. Speaking on an earnings conference call Wednesday morning, Parsons said: "The one disappointment in the quarter was Time Inc., whose results were once again less robust than we had expected." His words confirmed industry buzz that spiked with the company's closing of Teen People on July 25.

According to Time Warner figures, Time Inc. experienced declining revenue across a number of sources on a year-over-year basis, with subscription revenue falling 5 percent from $421 million in second quarter 2005 to $398 million in 2006. Other publishing revenues fell 9 percent, from $162 million in 2005 to $148 million in 2006.

One exception was ad revenue, which rose 2 percent from $743 million in second quarter 2005 to $757 million in 2006. Overall, quarterly revenue fell 2 percent from $1.35 billion to $1.32 billion, while quarterly income fell 11 percent from $306 million to $272 million.

Time Warner COO Wayne Pace attributed Time Inc.'s troubles to "a soft print advertising industry." Recent data from the Publishers' Information Bureau (PIB) suggests that the first half of 2006 has been difficult for the company. Ad pages declined from 23,498 during the first half of 2005 to 22,579 in 2006--a 3.9 percent drop. In percent terms, this performance compares poorly with Condé Nast, which saw a 1 percent rise in ad pages from 17,215 to 17,383, and American Media, which grew 6.3 percent from 3,578 to 3,803. Among top-tier players, only Hachette Filipacchi did worse--suffering a 5.3 percent decline in ad pages, from 7,543 to 7,143.

Although Time Inc. posted small gains in ad revenue in the first two quarters of 2006, it still trails Condé Nast and American Media in terms of percent growth. Time Inc.'s ad revenues rose from $2.501 billion in the first half of 2005 to $2.539 billion in the first half of 2006--a 1.5 percent increase. Conversely, Condé Nast's ad revenues rose from $1.478 billion to $1.588 billion--a 7.5 percent jump. And American Media grew from $255 million to $293 million--a 14.6 percent leap.

Time Inc.'s closing of Teen People came after a difficult 18 months, when the title faced a decline in circulation and ad pages. According to the PIB, Teen People's total ad pages for the first half of this year fell 14.4 percent from the same period in 2005, from 353 to 302. Its ad revenue fell more than 10 percent.