Advertisement
YOU ARE HERE: LAT HomeCollectionsFixme

Martha Stewart Posts Annual Loss

March 05, 2004|From Associated Press

Martha Stewart Living Omnimedia Inc. swung to a profit in the fourth quarter but reported its first annual loss Thursday as the legal problems of its namesake founder continued to take their toll on the company.

Chief Executive Sharon Patrick told investors on a conference call that the company was making contingency plans for a future without Stewart and could still thrive without her.

"We assure you that we have done the appropriate contingency planning," Patrick said. "We are well-positioned to weather the storm.... We are, by now, Team Tough."

The company warned investors that pressure from Stewart's trial would further weigh down advertising revenue in the first quarter, resulting in an estimated loss of 20 cents a share, far worse than the 13 cents that analysts polled by Thomson First Call had been expecting.

The multimedia company, which produces magazines, TV programs and merchandise, posted net income of $4.6 million, or 9 cents a share, for the fourth quarter of 2003. That contrasted with a loss of $2 million, or 4 cents, a year earlier.

Revenue fell 8.6% to $70.9 million.

On a per-share basis, the fourth-quarter results were 2 cents better than analysts were expecting, according to Thomson First Call. However, the company's shares were off 43 cents to $14.03 on the New York Stock Exchange.

The company said that its business benefited in part from continued success with its Martha Stewart Signature furniture collections and better-than-expected circulation results.

Patrick told investors on the conference call that many advertisers were reluctant to be associated with Stewart's name during the trial and were taking a wait-and-see attitude until it was over.

However, she said that the company and its products continued to have a strong draw with consumers and could continue to do so even without a close association with Stewart.

For the full year, the company reported a net loss of $2.8 million, or 6 cents a share, contrasted with a profit of $7.3 million, or 15 cents, in 2002. Full-year revenue fell nearly 17% to $245.8 million from $295 million.

Results in the company's publishing division were sharply lower in the fourth quarter because of declines in advertising and circulation at the company's flagship magazine, Martha Stewart Living, as well as investment in a new magazine, Everyday Food, where circulation is rising faster than expected.

On the whole, revenue from publishing declined nearly 28% to $33.1 million versus $45.7 million in the year-earlier period, and operating income in the division dwindled to $3.9 million from $15.5 million.

Revenue from merchandising nearly doubled to $22.5 million from $11.8 million as the company booked higher royalties from its agreement with Kmart Holding Corp. and reported brisk sales of Martha Stewart Signature furniture.

Advertisement
Los Angeles Times Articles
|
|
|