"We have a clear road map for growth that gives us confidence in the future of our business and in our ability to increase shareholder value," Susan Lyne, president-CEO, said in a statement accompanying second-quarter results. "We have successfully navigated a difficult period and are enjoying significant gains in advertising revenue and new-business opportunities."
To be clear, the company still isn't rolling in clover, much less profits; it now anticipates the year will bring an operating loss between $10.5 million and $11.5 million.
Beating analysts' estimates
But the second-quarter loss it reported today, $1.8 million, was only a fraction of the $34.2 million operating loss in the second quarter of last year. And at 1 cent a share, the deficit was much smaller than the 16-cent loss predicted by analysts in a Thomson Financial survey.
Revenue rose to $67.4 million, up 47% from $46 million in the second quarter of 2005, largely on the strength of rising ad revenue at magazines such as Martha Stewart Living and Everyday Food. The company said it expects ad-page growth at those titles to increase, to the tune of 45% at Martha Stewart Living and 60% at Everyday Food. For the six months of the year already completed, ad pages rose 74.5% at Martha Stewart Living and 25.7% at Everyday Food, according to the Publishers Information Bureau. The publishing division as a whole increased revenue in the quarter to $40.9 million from $31.7 million in the second quarter last year.
Expected loss for show
Broadcasting revenue reached $23.1 million in the second quarter, way up from $1.8 million in the quarter a year prior. The syndicated "Martha" TV show, which is about to enter its second season, isn't profitable, but Ms. Lyne said in a conference call with analysts this morning that the program has other benefits -- such as creating content that can be used later on the company website.
"We expect a small loss in our second season of a couple million dollars," Ms. Lyne said. "We are looking at ways to close that gap and clearly one of the reasons we are doing this broadband play is to do exactly that. We do think there are additional ways to monetize the show and at the same time create value in our other businesses."
Merchandising revenue remained flat at $10.2 million for the second quarter, but internet operations showed continued growth, contributing $4.6 million in revenue, more than doubling its take in the quarter last year.