Meredith Corp.'s fourth-quarter 2008 financial results hit investors hard. Earnings were more than cut in half from its fiscal 2007 results. Meredith posted $19 million in earnings, down from $52
million in the quarter before. Revenues were also down $385 million from $428 million. All that sent investors scrambling, pushing down the company's stock by more than 8% in midday trading to $25.55.
The company said that after a strong performance in the first half of fiscal 2008, the economic slowdown was tough--producing lower advertising demand from a soft retail
marketplace, which resulted in weaker sales. For its publishing group, the company experienced higher costs, particularly paper costs.
The fourth-quarter operating profit for publishing was $26
million versus $70 million in the comparable period in 2007. Total revenues were $306 million and advertising revenues were $153 million, compared to $345 million and $178 million, respectively, in
fiscal 2007.
Advertising pages--especially from food, prescription and non-prescription drugs and home marketers--declined more than 20%, accounting for about 75% of total fourth-quarter
advertising page declines.
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Circulation revenues declined at Parents, Family Circle and Fitness magazines.
The Meredith Corp. broadcasting group's operating profit was $19
million compared to 2007's $28 million. Revenues were $79 million, compared to $84 million in fiscal 2007. During the last six months, Meredith TV stations witnessed a decline in automotive
advertising, as well as retail and movies, leading to a decline in non-political advertising revenues. In the first six months, non-political advertising revenues rose 4%, from online advertising and
professional services and telecommunications ad categories.
Retransmission agreements for Meredith television stations increased fees 50% over the prior year.
As with other media companies,
Meredith says broadcasting online and video-related revenues showed strong gains--climbing 80% in fiscal 2008. Average unique visitors increased more than 300%. More than 1.3 million videos were
streamed each month during the year.
"The Better Show," a Web-based TV show riffing off its Better Homes & Gardens brand, will be carried in more than 35 markets beginning this fall. In
addition, Comcast video-on-demand customers downloaded more than 600,000 Parents TV videos in fiscal 2008.