Time Inc. print ad revenue falls 11% in Q2, but lower costs drives publisher’s P&L into the black
Reduced production, editorial and administration costs lead to an operating income of $61 million in the second quarter, versus a loss of $21 million in the same quarter a year ago
The publisher of Time magazine and Sports Illustrated, Time Inc., reported second quarter earnings before the bell this morning. Revenue fell 5.7 percent, but costs were reduced enough to produce an operating income of $61 million versus a loss of $21 million in the same quarter a year ago. The results beat estimates for income.
Advertising revenue fell 9 percent, with print advertising down 11 percent in the quarter, partially made up by a $3 million increase (4 percent) in digital advertising. Circulation revenue also fell, though only by 2 percent. Newsstand revenue fell only $1 million in the quarter.
It was aggressive cost cutting that drove net income to $24 million in the quarter, versus a loss of $32 million a year ago.
“Over a full year has passed since our spin-off from Time Warner,” said Time Inc. CEO Joe Ripp in the company’s earning announcement. “We remain confident in our plan to fundamentally reengineer the business and reposition our company for its return to growth. 2015 continues to be a pivotal year as we launch a portfolio of growth initiatives and invest to develop new revenue streams including through key acquisitions, and continue our disciplined capital allocation strategy.”
The company’s board of directors today also declared a regular quarterly cash dividend of $0.19 per share, payable on September 15 to all common stockholders of record at the close of business on August 31. The company will be moving its corporate headquarters to Brookfield Place in lower Manhattan later this year.
The company was spun-off one year ago carrying about $1.4 billion in debt and the company continues to service that debt. Cash on hand now has fallen to $338 million from $519 million a year ago.
Meredith, which was once rumored to be buying Time Inc. titles reported strong earnings in the same quarter (see here), though the Des Moines publisher was able to report growth in its broadcast properties, as well as the contributing results from its additions of the Shape and Martha Stewart media properties.