Meredith Corp., the publisher of Better Homes and Gardens, Family Circle and other magazine brands, on Wednesday reported a slight drop in its third-quarter net income as some national advertising clients tightened their belts and circulation revenue shrank.
Meredith attributed the pullback in national advertising sales among certain food and beverage, pharmaceuticals, and home industries clients to the sharply higher commodity prices that those companies are facing. Local ad revenue at TV stations, a smaller division of the company, grew thanks in part to a rebound in auto advertisements.
Total circulation revenue declined 9 percent due in part to rate changes. But Meredith said online subscription orders more than doubled. Other bright spots for the company included brand licensing, which saw a 15 percent jump in revenue, as Meredith continues to expand the number of Better Homes and Gardens-branded home products such as bathroom accessories that are sold at Walmart stores.
Revenue rose 8 percent in its integrated marketing segment, which covers digital advertising and customer relationship management services for national clients. Meredith said it expanded its relationship with home and garden retailer Lowe's, and renewed major contracts with Kraft and Chrysler during the quarter.
Total net income for the three months ended March 31 fell to $30.8 million, or 67 cents per share, from $33.3 million, or 73 cents per share, in the year-ago period which included a tax benefit.
The results topped the 65 cents per share expected by analysts polled by FactSet. Revenue fell 4 percent to $340.7 million from $353.3 million, shy of the $351.5 million expected by analysts.
Meredith expects fourth-quarter earnings per share of 60 cents to 66 cents per share, compared with analysts' average forecast of 66 cents per share. The Des Moines, Iowa-based company is forecasting a mid-single-digit decline in national ad sales.
For the full year, the company said it expects earnings to rise 20 percent year-over-year to a range of $2.72 to $2.78 per share. The midpoint is in line with the $2.75 per share expected by analysts.
Meredith's shares closed down $1.54, or 4 percent, at $34.40.
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