• by Erik Sass  @eriksass1, May 4, 2007

Martha Stewart Living Omnimedia posted first-quarter results showing a revenue increase of 7.4% compared to the same period last year, to $66.7 million--but also a larger loss of $11.87 million, nearly double last year's first-quarter loss of $6.84 million. Much of the loss was due to a $5.7 million expense associated with financial arrangements for the production of "The Martha Stewart Show." The publishing division's revenue rose 12% to $40.6 million.

The news of a loss was offset by the generally strong performance of the company's publishing and broadcast brands, which have enjoyed steady growth in ad demand over the last two years. The turnaround began with the resolution of a scandal, which saw Stewart sent to a minimum security prison for five months.

According to the most recent figures from the Publishers Information Bureau, Martha Stewart Living's ad pages grew 10.8% in the first three months of 2007, compared to the same period last year, while Martha Stewart Weddings grew 11%.

The company's first-quarter loss was also offset by its announcement of a new deal with Costco Wholesale Corp. to produce and sell a line of food items carrying both the Costco and Martha Stewart brands. The company is also launching the Martha Stewart Crafts line of paper-based craft materials at 900 Michael's Inc. stores around the country.