Magazine Giant Meredith: Our Ads Are Lousy, Too
by Peter Kafka
Posted on October 29, 2008 at 5:48 AM PT
What prompted Time Inc. to drop six percent of its staff?
Time Warner (TWX) won’t release its most recent quarterly results until next week. But you can get a pretty good sense of how its publishing unit has been doing by looking at the numbers that Iowa-based magazine giant Meredith Corp. (MDP) just released.
And it’s grim.
Revenues at Meredith’s publishing unit, which puts out titles like Better Homes and Gardens and Ladies’ Home Journal (that ad above is from a 1972 issue) dropped nine percent in the last year, to $300 million. But ad revenues fell much more steeply, dropping 18 percent to $148 million. And operating profit plummeted 40 percent, to $33 million.
The good news in the earnings release is that there are still operating profits. But these are worrisome results.
So far this year, most of the ad-based businesses that have complained about declining revenues have pointed to weakness in the financial and auto industries. But Meredith’s publications don’t rely on those sectors for their ads.
From the release:
Companies that operate in Meredith’s endemic advertising categories–including food and beverages, prescription and non-prescription drugs, and home–have been impacted greatly by the current economic downturn. Combined, Meredith magazine advertising revenues in these categories declined over 25 percent in the first quarter, according to Publishers Information Bureau (PIB).”
Not surprisingly, Meredith says that the current quarter looks depressing too. Publishing ad revenues are “down in the high teens” it says.
So, don’t be shocked to see equally lousy news from Time Inc. next week.
[Image Credit: jbcurio]
