TIME INC.’S PUBLIC RESULTS: On its first earnings call since spinning off from parent firm Time Warner in early June, Time Inc. reported a 1.6 percent dip in second-quarter revenue as slumping newsstand and subscription sales weighed down the publisher.
This story first appeared in the August 6, 2014 issue of WWD. Subscribe Today.
For the period ended June 30, Time Inc., which operates titles such as People, Sports Illustrated, Time and InStyle, swung to a loss of $32 million, or 30 cents a share. This compared with year-ago income of $75 million, or 69 cents a share. The company said the loss was related to restructuring and severance costs. Revenue slid 1.6 percent to $820 million from year-ago revenue of $833 million.
Analysts were looking for earnings per share of 16 cents on revenues of $821.3 million.
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“We are once again an independent public company,” said chairman and chief executive officer Joe Ripp on the earnings call Tuesday. “Time Inc. is the across the board industry leader in the U.S., and the largest magazine publisher in the U.K. based on print newsstand revenues.”
According to the company, print and other advertising revenues fell 1.3 percent to $387 million, as digital advertising revenues grew 12.1 percent to $74 million. Subscription sales slid 1.7 percent to $171 million and newsstand sales declined 12.6 percent to $83 million.
Time Inc. blamed its “tiered” subscription fees for its decline in subscriptions, but said it is working on fixing the problem. One solution could be adding paywalls to some of the company’s magazine’s Web sites, Ripp mused.
The ceo also outlined efforts to grow revenues through key acquisitions, like that of app maker Cozi Inc. and investment in 120 Sports for its digital sports network, while also citing a cost-cutting initiative, including layoffs, as well as key hires. “There is more change to come,” said Ripp, who touted the “longevity” of Time’s titles.
“We believe the strengths of our brands have become more important in the cluttered world of questionable digital content,” he said, noting that the firm will not invest in “silly things” but opportunities that are “value-generating.”
The firm said it will reveal the hire of a new executive who will head up mergers and acquisitions in the coming weeks.
For the year, the New York-based firm expects revenues to be between $3.3 billion and $3.37 billion, and adjusted operating income before depreciation and amortization of between $510 million and $547 million. Wall Street is looking for annual EPS of $1.13 a share on sales of $3.35 billion.