Shares of Time Inc. slid 5.4 percent Thursday to $18, after the New York-based magazine publisher cut its full-year forecast, citing a worse-than-expected print advertising environment.
The publisher of InStyle, People and Fortune posted a net loss of $913 million, or $8.30 a diluted share, in the third quarter, compared with a year-ago profit of $48 million, or 44 cents a share. The hefty loss was due to a $952 million goodwill impairment charge and flagging advertising and circulation revenue, the company said.
Time Inc. noted that the sale of its Blue Fin building in London for 415 million pounds, or about $638.3 million, contributed to the impairment charge. On an adjusted basis, Time Inc. earned 32 cents a share. Analysts were looking for earnings per share of 27 cents.
Weaker-than-expected print advertising revenue declines weighed down total revenues by 5.8 percent to $773 million.
“Magazine industry trends have been more challenging than we expected coming into the year,” said chairman and chief executive officer Joe Ripp on the earnings call Thursday.
The ceo said the negative trend doesn’t run through each brand, but he did reference All You magazine, which the company shuttered in October, as an example.
Ripp said Time Inc. is looking to forge a “path to profitable growth” for each magazine moving ahead, and cited Southern Living as a magazine that has been able to add revenue.
Print and other advertising revenue dipped 12.1 percent to $319 million, as digital ad revenue expanded 21.5 percent to $79 million.
Circulation revenue fell 6.5 percent to $261 million, pulled down by a 3.4 percent dip in subscription revenue to $168 million and a 12.2 percent slide in newsstand sales to $86 million.
Time Inc. revised its annual revenue forecast to a 5 to 6 percent decline from its prior view of a 3 to 6 percent dip.
It also projected 2015 adjusted operating income before depreciation and amortization of between $440 million and $470 million versus its previous forecast of between $440 million and $490 million.
Ripp said the company is still in investing mode — it recently acquired Jane Pratt’s xoJane, xo Vain, a host of digital companies for its Sports Illustrated brand and Zooey Deschanel’s Hello Giggles — but that it is looking for “smart” digital acquisitions.
“Anything that has digital in front of its name is overvalued,” Ripp said glibly. He also added that he’s “disappointed” with revenue from its partnership with Apple News.