A Glimmer of Hope Shines in Q2 Earnings – WARNING: Lots of numbers!

A couple of years ago, if someone told you that numbers like these would be “promising,” you wouldn’t believe them.  But after what the magazine industry just went through, we’ll accept just about anything.

Here are some snapshots:


The US division of the UK-based Future has come out relatively unscathed through what it called ‘exceptionally challenging market conditions’, with an overall revenue decline of just 2%, or 9% calculated on a constant currency basis.

Specifically, publishing revenues for the US operation fell 13% on a constant currency basis.  The publisher blamed ‘greater exposure to generic advertising market volatility’ in the territory, particularly with regard to its digital business.


The company Martha Stewart Living Omnimedia reported a net loss of $23 million through the first six months of the year, compared to the same period in 2008.  Revenues company-wide were $107 million, with $62 million coming from its publishing unit – a publishing decline of about 29%.

Its publishing business encompasses magazines and books.  Q2 saw revenues of $34 million compared to $46 million and operating income of $3 million and $7 million, respectively.  A decline in advertising pages, timing of special issues and lower newsstand revenue were blamed.  The only highlights were book-related.  “Lower revenues primarily reflect declines in magazine advertising revenue during a challenging period for the publishing industry,” the company said.  You can read more here.


McGraw-Hill overall reported a 28% decrease in net income for the second quarter, compared to the second quarter of last year.  Net income for the second quarter was $164 million.  In addition, revenue in the second quarter dropped by 12% to $1.5 billion.  For the b2b group – which includes the magazines – revenue in the second quarter decreased by 10% to $216 million.  Read more here.


Meredith’s fiscal year begins on July so these are their Q4 results: Net loss for the entire company was $164 million compared with a profit of $19 million a year earlier.  On the bright side, the company managed to pay down its debt by $100 million, bringing its debt balance to $380 million, down 22% from a year ago.

The publishing sector revenues were $1.13 billion versus $1.23 billion in FY09.  The recession significantly impacted advertising spending industry-wide throughout fiscal 2009.  However, advertising revenues for Meredith’s magazines and related websites improved in the second half of fiscal 2009 compared to the first half, mostly due to cost cuts.  Second-half magazine advertising declined 12% from the prior-year period, compared to a drop of 18% in the first half of fiscal 2009.  Total company online advertising increased 7% in the second half after declining approximately 14% in the first half.

For the full fiscal year, Meredith’s share of magazine advertising increased to 11% from 10%, according to Publishers Information Bureau (PIB).  In the fourth fiscal quarter, Meredith’s share grew to 13% from 11%.  And readership for Meredith’s major subscription magazines held steady at 110 million, according to Mediamark Research and Intelligence.  Read more here.


In its financial statement, Time Inc parent Time Warner reported that profits company-wide were down 5% to $2.5 billion through the first six months of 2009.  Its publishing unit, Time Inc, reported a profit of $70 million, down roughly 78% from $311 million during the same period last year.

Magazine publishing saw earnings plunge 53% (due to higher pension costs) on a 22% drop in revenue (to 915 million.)  Subscription revenue down 18% blamed partly on a foreign exchange rate hit from its UK wing IPC, but also on falling sales.  Read more here.

Washington Post Company (NEWSWEEK, BUDGET TRAVEL)

Magazine publishing revenue fell 27% to $45.5 million in the second quarter for The Washington Post Company.  The magazine division posted an operating loss of $5 million in the second quarter and a loss of $25.4 million for the first half of the year.  Pay-outs to Newsweek’s voluntary early retirement accounted for $6.6 million in the first quarter of the year.

NEWSWEEK saw a 40% drop in ad pages for Q2 of 2009 and a 32% decline for the first half.


This is an excerpt from the transcript of the Q2 2009 earnings call on July 30, 2009:

Question: Could you breakout the contribution to revenue in the quarter from the WebMD Magazine publishing business?

Mark Funston, Chief Financial Officer of WebMD: We don’t separately breakout publishing.  As I said, it’s a de minimis part of our revenue.  So it’s predominantly the advertising from our magazine, and we’ve just consolidated that because it’s so little into the single line item.

Wayne Gattinella – Chief Executive Officer & President
Yes, I mean, I would just say that the magazine originally was launched as a branding effort.  It’s distributed bimonthly to 85% of the doctor’s offices around the country at no charge and it was really meant to really extend the brand at a very important time when people are waiting to see the doctor, and it is supported by advertising.  As Mark said, the overall revenue is relatively insignificant; it is a profitable operation and, again we see it as a strong part of our branding overall.

Read the entire transcript here.


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