Shares of Time Inc. fell 1.8 percent to $21 in midmorning trading, after the New York-based publisher posted first-quarter revenue declines amid falling print advertising sales.
For the quarter ended March 31, Time Inc. registered a loss of $9 million, or 8 cents a diluted share, compared with a year-ago loss of $74 million, or 68 cents a share. The prior-year loss included $115 million in restructuring and severance costs.
Stripping out special items, the company said it recorded a loss of 6 cents for the first quarter, which was better than the 20-cent loss anticipated by Wall Street.
The publisher of InStyle, People, Entertainment Weekly and Sports illustrated said revenues slid 8.7 percent to $680 million from $745 million in 2014. Analysts expected revenues of $680.9 million.
Time Inc. attributed the shrinkage to a stronger U.S. dollar relative to the British pound, which brought down revenues by $9 million.
The bigger issue is declines in advertising revenue, which are plaguing the print publishing world as a whole.
Advertising revenues slid 9.5 percent to $353 million, as print and other advertising revenue declined 12 percent to $280 million. Digital ad revenues increased just 1 percent for the quarter to $73 million.
Another issue hampering print-centric firms is waning newsstand sales. At Time Inc., newsstand revenues fell yet again — by 10 percent in the quarter to $77 million, and subscription revenues declined 8 percent to $165 million. Like every other print publisher, the company is in the process of shifting its business model to become more digital – a feat that requires not only a change in strategy, but one in the firm’s entire culture. Time Inc. has laid out plans to add e-commerce, ramp up video across platforms such as mobile and Web, and said it would test a metered paywall this year.
“Our results and financial performance reflect progress in the fundamental reengineering of our business, and in repositioning the company for its return to growth,” said Joe Ripp, chairman and chief executive officer. “We remain confident in our plans to extend our powerful brands across platforms and into new revenue streams.”