Fiscal Q1 for Meredith Corporation (July-September) saw revenues and profits decline, but that was to be expected in a non-political year and the company is so bullish that the board of directors announced a dividend boost for shareholders a day before the quarterly financial report. TV revenues were down 9%, but up 3% excluding the 2010 political windfall.
Wells Fargo analyst Marci Ryvicker noted in a quick dispatch to clients that auto was up 4% in fiscal Q1 for Meredith’s TV group and pacing up in the current quarter. And she added that management noted some “trickles” of candidate advertising, along with more robust issue advertising already appearing.
“TV station revenue ex-political was better than our expectations for our coverage group both in terms of results, which were up 2.6% (versus our estimates: BLC flat, GTN down 1%, SBGI down 2%, TVL down 2%, CBS up 1%) and outlook of up mid single digits (versus our estimates of +2.5-+3.0% for all TV groups under coverage),” the analyst wrote. Ryvicker warned, however, that Meredith reported that its TV group outperformed the industry, so she would not extrapolate the results to other broadcasters. Still, she said, it “it feels to us like TV core advertising picked up” throughout the calendar Q3 and is pacing stronger in Q4.
Meredith’s Local Media Group (its name for the TV division) saw revenues in the quarter decrease 9% to $69.3 million. Non-political advertising was up 2.6% to $59.3 million, while political dropped to $583K from $11.6 million. Operating profit for TV declined 33.9% to $11 million and EBITDA dropped 24.8% to $17 million.
The magazine division, National Media Group, saw total revenues decline 3% to $258.6 million, with circulation up and advertising down. Operating profit declined 9.1% to $36 million and EBITDA was off 8.4% to $39.4 million.
For the current fiscal Q2 (October-December) Meredith reported that TV non-political advertising is currently packing up in the mid single digits. Magazine ad revenues are expected to be in line with what the company has been seeing throughout calendar 2011, which is a drop of 8-12% from last year.