NEW YORK (AP) — A day after announcing plans to downsize its magazine division, Martha Stewart Living Omnimedia Inc. said the declining value of its publishing business and a drop in ad revenues widened its third-quarter loss.
Shares of the New York lifestyle, media and merchandising company slipped 13 cents, or 4.4 percent, to $2.82 in morning trading Friday.
Martha Stewart Living wants to focus on online video and other digital content as its print magazine unit, its largest business division, declines. In an effort to save $33 million to $35 million per year, it will stop publishing its Everyday Food magazine as a standalone publication and try to sell its Whole Living magazine, and cut publishing jobs. The moves would leave the company with just its flagship publication and the quarterly Martha Stewart Weddings.
For the period ended Sept. 30, Martha Stewart Living said Friday that it lost $50.9 million, or 76 cents per share. A year earlier it lost $9.7 million, or 18 cents per share. The most recent quarter included a $44.3 million charge to write down the value of Martha Stewart Living's publishing business, which the company said was due to the overall weak publishing industry and the decrease in its print and digital advertising dollars.
For the industry, U.S. magazine sales at newsstands fell nearly 10 percent in the first half of 2012.
Excluding the one-time costs, the company lost 9 cents per share in the quarter. Analysts polled by FactSet expected an adjusted loss of 11 cents per share.
The weaker publishing and broadcasting divisions weighed on revenue, which fell 17 percent to $43.5 million from $52.2 million. Wall Street expected $46 million.
"We have taken actions designed to significantly reduce the cost structure of our print and broadcasting operations this year, an important step toward positioning (Martha Stewart Living) for profitable growth," CEO Lisa Gersh said Friday. Martha Stewart Living hasn't posted an annual profit since 2007, and its revenue has been declining since then as well.
The cuts announced Thursday, combined with previously announced restructuring efforts in its broadcast TV division, are expected to remove $45 million to $47 million in annual costs from the company's operating costs.
Revenue in the company's merchandising division grew 7 percent to $13.2 million, helped by design fees from J.C. Penney and a home office line.
