Meredith Reports Strong First Quarter Earnings Growth
(Press Release) DES MOINES, Iowa, Oct. 26 — Meredith Corporation, the leading media and marketing company serving American women, today reported that fiscal 2011 first quarter earnings per share increased 40 percent to $0.56, compared to $0.40 in the year-ago period. Revenues rose 4 percent to $344 million.
Fiscal 2011 first quarter highlights included:
- A 7 percent increase in total Company advertising revenues;
- Television spot advertising revenue growth of 27 percent, including $12 million in net political advertising and an 8 percent increase in non-political advertising;
- Higher magazine net advertising revenues per page, and more than 20 percent growth in online revenues across Meredith's national websites;
- Strong revenue growth from businesses not dependent on advertising including Meredith Integrated Marketing (+7 percent) and Brand Licensing (+17 percent); and
- A decline in total Company expenses, even with increased investment in emerging media platforms, including mobile and eTablets.
"We're off to a great start in fiscal 2011, with first quarter profit growth of 40 percent driven by record demand for political advertising, as well as strong non-political advertising growth at our Local Media Group properties," said Meredith Chairman and Chief Executive Officer Stephen M. Lacy. "At the same time, our National Media Group increased magazine advertising rates per page, grew digital advertising revenues, and posted strong revenue growth in businesses not dependent on advertising. We also reduced total company expenses 1 percent, on top of an 8 percent decline in the year-ago period."
Local Media Group Profits Rise
Fiscal 2011 first quarter Local Media Group operating profit rose significantly to $17 million from $2 million in the year-ago period. Revenues rose 25 percent to $76 million.
In the first quarter of fiscal 2011, political advertising revenues were $12 million, a record high for a Meredith fiscal first quarter, led by strong political spending in the Hartford, Las Vegas and Nashville markets. Non-political revenues rose 8 percent to $58 million. Performance was particularly strong at Meredith's stations in Hartford, Phoenix and Las Vegas. Eight of Meredith's 10-largest non-political advertising categories grew revenues, led by automotive, retail and media-related advertisers.
"At Meredith, we continue to deliver strong advertising revenue growth, including the development and successful execution of innovative sales programs targeting non-traditional local television advertisers," Lacy said. "Local broadcast television remains the most effective way for advertisers to efficiently reach large consumer audiences and drive them to retail."
Meredith delivered strong ratings during the most recent July measurement period. Meredith's CBS affiliate in Hartford was once again No. 1 in all newscasts, as well as sign-on to sign-off. The NBC affiliate in Nashville was No. 2 in both late news and sign-on to sign-off, and also posted growth in morning news, while CBS affiliates in Atlanta and Phoenix, and Fox affiliates in Greenville and Las Vegas, all grew evening news viewers.
Meredith Video Studios fiscal 2011 first quarter revenues also grew as the daily Better syndicated television show increased its carriage to approximately 80 markets reaching nearly 60 percent of U.S. TV households. In November, Better will launch on KCAL in Los Angeles - the nation's second-largest television market—giving the show a presence in four of the top five markets in the country.
National Media Group Sees Circ Drop, Slight Profit Rise
Fiscal 2011 first quarter National Media Group operating profit rose slightly from the year-ago period to $39 million. Revenues were $268 million, compared to $272 million in the year-ago period.
Total advertising revenues were $136 million, approximately even with the year-ago period, on higher net advertising revenue per magazine page. Meredith was cycling against its strongest quarter of industry outperformance (nearly 30 percentage points) in the prior-year period, according to Publishers Information Bureau data. Online advertising revenues increased 21 percent, led by growth in the pharmaceutical, consumer packaged goods and retail categories.
Circulation revenues declined 4 percent in the first quarter of fiscal 2011, as expected, due primarily to Meredith's strategic decision in January 2010 to reposition its Special Interest Media business. Special Interest Media profit increased significantly in the quarter over the year-ago period as a result of the repositioning.
Meredith continued to expand its consumer connection during the first quarter of fiscal 2011 as demonstrated by:
- Audience gains for Meredith's measured magazines, up 3 percent according to the most recent data from Mediamark Research and Intelligence. It currently stands at 113 million readers.
- Traffic to Meredith's digital properties. Monthly average unique visitors across Meredith's National Media websites were 16 million and monthly page views averaged 200 million. Monthly unique visitors from mobile devices to the new Better Homes and Gardens, Parents and Fitness mobile sites combined averaged nearly 1 million during the first full quarter of operation, while page views averaged approximately 6 million.
- Continued expansion of the Better Homes and Gardens-branded line of home products sold at Walmart. Today, the program encompasses approximately 2,500 SKUs, up from approximately 1,500 in the year-ago period. A new line of high-quality cookware and small appliances debuted earlier this month.
Meredith Integrated Marketing's fiscal 2011 first quarter revenues rose 7 percent. Growth was driven by a cross-platform approach incorporating content development, CRM, digital and social capabilities for new and existing clients, including Lowe's, SunTrust Bank and Chrysler.
"The relevance of our national brands to consumers and marketers alike continues to increase," Lacy said. "We remain focused on growing our already very strong connection to American women across multiple platforms - including print, online, mobile, social, events and licensed products sold at retail - and providing clients with innovative marketing solutions to reach their target audiences."
National Media Group fiscal 2011 first quarter operating expenses declined 2 percent as efforts to improve efficiencies continued to be realized.
For more information on Meredith's fiscal year 2011 first quarter financial statement click here.