Magazine publisher Time Inc. (TIME) has reported a 0.4% increase in third-quarter revenue, growth that was tied to some recent corporate transactions and offsetting weak print advertising revenue. Here are the most important things to know about company’s latest earnings report.
What you need to know: The results from Time Inc. — the publisher of People, Entertainment Weekly, Sports Illustrated and Fortune — were affected by several factors lumped together as “corporate transactions,” which include the acquisition of Cozi Inc., the sale of Mexico-based GEX, and other transactions. Excluding those items, revenue would have declined 6%, hurt by lower print and other advertising revenue, as well as falling circulation revenue.
The company, which was spun off earlier this year from former parent Time Warner (TWX), is now a stand-alone magazine producer at a challenging time for the publishing industry, which has struggled to adapt to the digital world as more readers look to social media, blogs and other web properties to get their news fix.
And while Time Inc. on Tuesday reported a drop in newsstand revenue for the latest quarter, there were some notable bright spots. A March 2014 price increase of People magazine generated an additional $4 million. Meanwhile, digital advertising revenue increased 5% from a year ago, and excluding the impact of corporate transactions, digital ad revenue would have leapt 19%.
But the company also narrowed its full-year targets, citing weak print ad booking trends. It now sees revenue for 2014 between $3.27 billion and $3.3 billion, slightly below the prior expectations of $3.3 billion to $3.37 billion.
The big number: Time’s revenue and net income results both exceeded expectations. The company’s revenue totaled $821 million, above the $817.5 million projected by analysts surveyed by Bloomberg. Adjusted profit for the third quarter totaled 41 cents in the latest quarter, below last year’s 67-cent profit, but above the 34 cents that Wall Street analysts had predicted.
What you might have missed: Time Inc. is making some progress on the digital side. The company said it served 93.6 million multi platform unique visitors during September in the U.S., up 27% since December when excluding CNNMoney.com, a partnership that was terminated when Time Inc. was spun off.