Time Inc. Reports Profit Decline but Gives Optimistic Sales Guidance
11 February 2016 - 11:40PM
Dow Jones News
Time Inc. said profit dropped in its latest quarter as the
world's largest magazine publisher continues to invest in its
transformation and beef up its digital platforms.
Though its earnings decline was steeper than expected, revenue
topped expectations and the company offered an upbeat sales outlook
for the year.
The publisher, whose covers also include People, Travel +
Leisure and Fortune, spun off from its former parent Time Warner
Inc. in 2014 in one of many moves by media giants to shed print
arms.
Recently, Time said it would realign itself in an attempt to
bolster sales from its largest marketing clients. As part of that
push, the publisher on Thursday said it would acquire data-driven
marketing firm Viant Technology Inc. for an undisclosed amount.
Irvine, Calif.-based Viant operates several digital ad technology
and media companies including Vindico and Myspace.
The move to broaden its digital operations comes as print sales
continue to decline. In the latest quarter, Time said digital ad
revenue rose 17% from a year earlier as the company saw more
visitors to its platforms and growth in video sales. That increase
offset a 6.6% decline in print ad sales and helped counter lower
revenue from subscriptions and newsstands. Overall revenue slipped
2%.
Time booked a hefty amount of restructuring-related charges
during the quarter, further pressuring its bottom line. Those costs
jumped to $169 million from $28 million a year earlier, while
Time's overhead costs rose 6.3% during the quarter.
In all, Time reported a profit of $17 million, or 15 cents a
share, down from earnings of $145 million, or $1.32, a year
earlier. Excluding restructuring and severance costs, among other
items, Time earned 58 cents per share, up from 73 cents in the
year-ago quarter.
Revenue declined to $877 million. Analysts projected 66 cents in
adjusted per-share profit on $872.1 million in sales.
For the year, Time expects revenue to rise between 1% and 5%
after having fallen 5% in 2015. The estimate translates to $3.13
billion to $3.25 billion, above the $2.99 billion analysts have
anticipated.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
February 11, 2016 07:25 ET (12:25 GMT)
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