NEW YORK – Martha Stewart Living Omnimedia Inc. (MSO) posted a wider quarterly loss on Wednesday as costs associated with the start-up of its new television show outweighed stronger magazine advertising.
Omnimedia's second-quarter net loss widened to $33.5 million from $17.8 a year earlier, when the company was reeling from the criminal prosecution of founder Martha Stewart. The loss per share widened to 65 cents from 36 cents.
With Stewart out of prison, though still under house arrest, advertising has picked up at the company's key magazines, Martha Stewart Living and Everyday Food (search).
Advertising pages in Martha Stewart Living increased 42 percent in the quarter. while Everyday Food pages increased by 65 percent.
Overall revenue for the quarter climbed 4.3 percent to $46 million, but results were hurt by a $16.8 million charge related to the production of its new syndicated television show, "Martha."
Stewart, a homemaking entrepreneur and one of the most famous businesswomen in America, plans to return to television this fall with "Martha," as well as a spinoff of Donald Trump's prime-time reality hit "The Apprentice (search)."
"The momentum we began to build early in 2005 is starting to deliver a quantifiable improvement in performance," Chief Executive Susan Lyne said in a statement. "We have exceeded our own plan both in terms of results and in the success of our efforts to leverage the consumer connection with Martha and the brand."
Omnimedia shares were down 69 cents, or nearly 2.5 percent, at $27.32 on the New York Stock Exchange (search).
The media company said it expects "significant year-over-year improvements" in the second half, with better circulation and advertising revenue and the launch of the TV and radio programs.
It forecast a third-quarter operating loss of $25 million to $26 million, and a fourth-quarter operating loss of $1 million to $2 million. Both quarters will include non-cash charges estimated at $13 million, the company said.
Stronger advertising was also reported by another magazine publisher, Meredith Corp. (MDP), which saw fiscal fourth-quarter earnings rise 12 percent.
The publisher of Better Homes and Gardens and Ladies' Home Journal posted a profit of $42.2 million, or 83 cents a share, up from $37.7 million, or 72 cents a share, a year earlier.
The results, which were in line with the average forecast among analysts polled by Reuters Estimates, were driven in part by an 8 percent rise in advertising revenue in its publishing division. It cited strength in the food, cosmetics, travel and automotive categories.
Total revenue rose to $332.4 million from $309 million.
The company's stock fell 29 cents to $49.21.
To build advertising revenue even further, the company recently added to its magazine portfolio with the purchase of the magazines Family Circle, Parents, Fitness and Child from Bertelsmann's Gruner + Jahr USA (search) unit for $350 million. The deal closed July 1.
The company said earnings for the fiscal first quarter and full-year fiscal 2006 would likely rise from the prior year but be slightly below analysts' current average forecasts.
For fiscal 2006, Meredith said it expects earnings of about $2.80 per share, up 12 percent from fiscal 2005 but below the average forecast of $2.82 compiled by Reuters Estimates.
For the first quarter, it said earnings per share will be about 50 cents, compared with analysts' average forecast of 52 cents.