MEREDITH’S NOT-SO-OPTIMISTIC AD VIEW: Meredith Corp., owner of a smattering of shelter, family-centric and food magazines, as well as a handful of local television stations, isn’t so optimistic about the advertising environment this year.
Despite improved March ad numbers from rival titles at Hearst Magazines and Condé Nast Publications, Meredith noted that its magazine and digital ad business this year will likely be flat versus 2013. On its second-quarter earnings call Wednesday, the company said magazine advertising in the first quarter would be down more than the midsingle-digit drop it expected. It pointed to a pullback in advertising from drug, cosmetics and packaged goods companies, which is impacting the magazine industry as a whole.
Taking the long view, chairman, president and chief executive officer Stephen Lacy said, “Calendar 2013 advertising performance was much stronger than calendar 2012, both for Meredith and for the industry in total. However, early calendar 2014 advertising appears to be off to a slow start. That said, industry experts are predicting full-year calendar 2014 magazine and digital advertising performance to resemble that experience in calendar 2013, the year just finished.”
Despite the cheery view of the situation, Meredith logged a 4.7 percent dip in national media advertising for the quarter ended Dec. 31 to $114.5 million from $120.1 million a year earlier. Total revenue for the company, which includes local and national media advertising and circulation, slid 1.8 percent to $354 million.
The profit picture wasn’t exactly rosy either, as earnings for the quarter declined 14.1 percent to $30.6 million, or 67 cents a diluted share. Wall Street anticipated earnings per share of 68 cents on sales of $354.1 million.
The company blamed the Super Bowl for a portion of the ad declines in its local media business, which is heavily focused on CBS markets. The Super Bowl moved over to Fox, and to make matters worse, the Olympics will be broadcast on NBC, so there will be a “certain softness for the CBS stations,” Meredith said.