Martha Stewart Living Q3 Loss Widens

Martha Stewart Living Omnimedia Inc. (MSO) shares dropped 16 percent Thursday after it posted wider quarterly loss alongside a charge for the Martha Stewart version of "The Apprentice" television show.

This year's results included a 21-cent-per-share noncashcharge related to the "The Apprentice: Martha Stewart (search)," which far outweighed stronger advertising at the company's flagship magazine. Revenue rose 5.4 percent to $40.9 million

Analysts on average had expected the company to post a loss of 30 cents a share, according to Reuters Estimates. They are expecting earnings of 21 cents a share with revenue of $81.1 million for the fourth quarter.

But Omnimedia said on Thursday that its revenue would be around $80 million and operating income would be about break-even. It previously said it would likely take another noncash charge in the fourth quarter.

Stewart hosts another daily talk show, is launching a Sirius Satellite Radio Inc. (SIRI) channel, putting out how-to videos and recently announced an agreement with KB Home to build and design houses.

Her renewed visibility has translated into more demand from advertisers, with ad pages at the flagship Martha Stewart Living up 48 in the quarter.

"Fourth quarter ad pages are currently expected to double, and advertising commitments for 2006 are very strong," Chief Executive Susan Lyne said in a statement.

For the third quarter, publishing revenues rose to $27.6 million from $22.2 million. Revenue rose 5.4 percent to $40.9 million from $38.7 million a year ago, when the company was reeling from the criminal prosecution of Stewart, its founder.

Still, some of Stewart's recent ventures have yet to live up to expectations, including her daily TV show "Martha." The company said Thursday that ratings for the first five weeks "were below our expectations" and said it is "tweaking the format and promotion to drive more consistent ratings."

Shares of Omnimedia were down $3.42 at $17.78 on the New York Stock Exchange (search).