• by Paul Gough , January 28, 2004

Defying magazine industry conditions of gloom and doom, Meredith Corp. performed strongly in the last quarter of the year, as double-digit quarterly revenues boosted the magazine unit's performance above the company's broadcast TV stations group.

Meredith reported an 8.8 percent increase in advertising revenues throughout the company in the quarter ended Dec. 31, Meredith's fiscal second quarter. While total advertising revenues weren't broken out in an earnings report released Tuesday, total publishing revenues were up 21 percent to $206.85 million and magazine ad pages were up 22 percent in the quarter according to the Publishers Information Bureau, outperforming the industry, which dropped 3 percent. Meredith publishes a number of titles, including Better Homes and Gardens, Ladies's Home Journal, and Country Home.

Without American Baby, which it acquired from Primedia in December 2002, revenues would be up 9 percent and total magazine ad pages would be up 18 percent.

Steve Lacy, head of Meredith's magazine publishing group, said that Better Homes and Gardens and Ladies' Home Journal grew advertising pages 17 percent in the quarter and market share to 44 percent in the women's service category, up from 43 percent.

"Better Homes and Gardens posted its best fiscal second quarter ever in terms of advertising pages, and we are encouraged by the growing diversity of its advertising base," Lacy told investment analysts in a conference call Tuesday morning. Gains included automotive, technology, and retail categories. Meredith's largest categories are home/building, food/beverage, pharmaceuticals, and direct response.

Lacy said advertising revenues in the current quarter are expected to be up in the low- to mid-single digits. Meredith's broadcast unit had a tougher row, since it had to come out of the gate facing a comparison of $14.1 million in political advertising from the same quarter in 2002. Total broadcasting revenues were down 9 percent and profit was down 22 percent, which marks similar results for other companies that reaped a political-ad windfall in 2002. But there were bright spots, with non-political ad revenues up 10 percent.

"The every-other-year effect of political advertising clouds year-to-year comparisons," explained Kevin O'Brien, head of Meredith's broadcast group.

Pacings in the third quarter are up in the mid-teens compared to 2003, he said.