Earnings: MSLO Loss Widens On Impairment Charge; Revs Fall 25 Percent
This story was written by David Kaplan.
The Q1 results from Martha Stewart Living Omnimedia (NYSE: MSO) were predictably dismal, given the state of the media depression. Revenues were down 25.7 percent to $50.4 million ($0.31 per share), while the operating loss widened considerably to $15.5 million from from $4.5 million in Q108. The loss was attributed to a $7.1 million impairment charge on an equity investment; not counting the writedown, the expanded net loss still would have still been significant, coming in at $8.4 million. No mention was made in the earnings statement of former co-CEO and president of media Wenda Harris Millard, who announced her departure last week.
Earnings release | Webcast (11:00 AM EDT
More details from the earnings report, after the jump
Internet: Revenues were down 23.5 percent to $2.6 million, though that comparison doesn't reflect revenue from Martha Stewart Flowers, which is now recorded in Merchandising. Also, the online segment's operating loss was reduced marginally to $2 million last year's loss of $2.2 million. On the plus side, digital ad revenue grew 13 percent compared to the prior year's quarter. More after the jump
Publishing: Q1 revs plunged 30.4 percent to $28.4 million from $40.8 million last year. The company cited lower ad pages, as well as timing of special issues and general softness in newsstand revenue. Operating loss was $1.9 million compared to operating income of $1.7 million in Q108.
Digital initiatives post-Millard: At the start of the call, one analyst asked what was the status of the digital business following the exit of Millard, who has joined media advisory firm Media Link. MSLO Chairman Charles Koppelman, who will be overseeing the business, said that the company's online initiatives were all in place and there would be no disruption, adding tersely, "We had a digital business even before Wenda joined MSLO" in 2007.
By David Kaplan