The drop was expected due to a $25 million decline in political ad dollars. The Local Media Group which includes its television stations and a video content creation unit scored $104 million, in fiscal Q2 2014 revenue, down 6.4% compared to $111 million in the prior-year period.
That drop “was nearly offset” by growth in retransmission revenues and non-political advertising revenues, the company said. Local Media Group non-political revenues increased over 20%, led by growth in non-political advertising and retransmission revenues. Non-political advertising revenues increased 10%, driven by strong performances from Meredith television stations in Phoenix, Kansas City and Las Vegas.
Fiscal Q2 Local Media Group operating profit was $35 million, compared to $45 million in the prior-year period. Fiscal Q2 operating profit included $1.6 million of transaction expenses.
On 12/23/13, Meredith agreed to purchase KTVK-TV Phoenix (independent); KASW-TV Phoenix (CW) and KMOV-TV St. Louis (CBS)—the spinoff from Gannett’s $1.5 billion acquisition of Belo.
The entire company reported total revenues of $354 million in Q2, compared to $361 million in the year-earlier quarter—down 2%.
Fiscal Q2 2014 EPS was $0.67, which includes $1.6 million, or $0.02 per share, of transaction expenses. Prior-year EPS was $0.79, or $0.89 excluding special items.
“We continued our strong performance into the second quarter of fiscal 2014,” said Meredith Chairman and Chief Executive Officer Stephen Lacy. “Our National Media Group delivered revenue and profit growth in the quarter, while our Local Media Group achieved record revenue and profit performance for a non-political fiscal second quarter and first half. Importantly, we continue to execute strategic initiatives to deliver increased cash flow and returns to our shareholders over time, most recently through the announced acquisition of great television assets in attractive markets,” Lacy continued.
National Media Group revenues grew slightly. Operating profit grew more than 25%, and was up 1% excluding special items in the prior-year period. Performance was driven by Meredith’s parenthood and food brands, including Parents, FamilyFun and Allrecipes.
Meredith’s brand licensing revenues increased more than 30%, due primarily to continued strong sales of over 3,000 SKU’s of Better Homes and Gardens’ licensed products at more than 4,000 Walmart stores nationwide.
Meredith Xcelerated Marketing grew revenues, and operating profit increased more than 35%, driven by new and expanded programs, including those with Kia Motors, Mercer, Chrysler and Maserati.
Circulation revenues grew slightly to $143 million in the first half of fiscal 2014, due primarily to strong performance from Meredith’s parenthood brands. Meredith launched Allrecipes magazine, the media industry’s first major print extension of a digital brand, during the first half of fiscal 2014. Advertising and consumer interest has been enthusiastic and Media Industry Newsletter named it Magazine Launch of the Year.
Fiscal 2014 first half earnings per share were $1.20, which included the $0.02 per share of transaction expenses. In comparison, prior-year earnings per share were $1.34, or $1.44 excluding special items. Meredith recorded $37 million, or $0.50 per share, less of political advertising revenues in the first half of fiscal 2014 than in the prior-year period, as expected in an off-election year. Total revenues were $711 million, compared to $715 million.