Martha Stewart Living Omnimedia Inc. reported on Wednesday a narrower loss in the second quarter compared with a year ago as the media company benefited from strong sales of its merchandise and solid growth in online advertising revenue.
However, shares fell more than 10 percent in trading as its key publishing segment suffered a sales decline in the quarter. Company executives told investors during a conference call following the earnings release that broadcasting revenue would fall in the current quarter.
The company, which publishes the Martha Stewart Living magazine, manages "The Martha Stewart Show" and sells related products, posted a loss of $1.25 million, or 2 cents per share in the quarter ended June 30. That compares with a loss of $6.4 million, or 12 cents per share, in the year-ago period.
Total revenue reached $55 million,from $57 million in the year-ago period.
Analysts surveyed by Thomson Reuters forecast a 3-cent loss on revenue of $55.2 million.
"At the midpoint of the year, we are holding our own as we continue to aggressively roll out new relationships with partners like Martha Stewart Pets line at PetSmart that position the company for attractive growth," said Charles Koppelman, executive chairman and principal executive officer in a statement.
The company's publishing division reached $30.6 million down from $33.5 million in the year-ago period. The decline was primarily due to the timing of the spring issue of Martha Stewart Weddings, which was recognized in the second quarter of 2009 compared with the first quarter of 2010. Excluding that, advertising revenue rose 3 percent compared with the prior year's quarter. Ad pages in August issue of Martha Stewart Living rose 29 percent over the same period last year.
The company's broadcasting division had revenue of $8.2 million, compared with $10.3 million in the year-ago period due to lower revenue from "The Martha Stewart Show," lower radio revenue and the absence of TurboChef in the quarter.
The company's online division had $4.7 million in revenue, up 12 percent from $4.2 million in the year-ago period. Advertising revenue rose 13 percent.
As for merchandising sector, the division had revenue of $11.8 million, up from $9 million. That included the results of an additional $2.2 million in revenue received from the early termination of the company's agreement with 1-800 Flowers.com. Excluding this revenue, but including Kmart revenue in the prior year, merchandising revenue rose 7 percent over the year-ago period.
Martha Stewart Living's shares fell almost 57 cents to $5.16 in late afternoon trading.