) posted fourth-quarter fiscal 2013 earnings of 75 cents a share,
surpassing the Zacks Consensus Estimate of 71 cents and
increasing 12% year over year, owing to the strong performance of
National and Local media groups.
Going forward, management expects earnings to be in the range
of $2.60 - $2.95 per share for fiscal 2014. Moreover, for the
first quarter of fiscal 2014, earnings are projected in the range
of 48 cents - 53 cents.
Revenue & Margins
Total revenue for the quarter strengthened 3% year over year
to $387 million, reflecting an increase of 12% in circulation
revenue to $87.9 million coupled with a 10.7% rise in other
revenue to $94.9 million. However, advertising revenue declined
2.9% to $204.2 million. Total revenue surpassed the Zacks
Consensus Estimate of $385 million.
Total operating expenses for the quarter rose 2.7% to $328.9
million, reflecting an augmentation of 4.6% in SG&A expenses
coupled with a rise of 1.6% in production, distribution and
Operating profit grew 6.7% to $58 million, whereas adjusted
operating margin expanded 50 basis points to 15%.
National Media Group
revenues increased 1.6% to $294.6 million, attributable to a 12%
improvement in circulation revenues. Segment's operating
profit increased 14.5% year over year to $43.4 million,
reflecting growth at brand licensing activities, Allrecipes and
Meredith Xcelerated Marketing.
Meredith now projects National Media Group advertising
revenues to marginally increase during the first quarter of
Local Media Group
revenues rose 9.1% to $92.4 million, attributable to a
significant rise in other revenues that came in at $22.4
Political advertising revenues plunged 77.8% to $0.7 million
compared with $3.3 million in the year-ago quarter. Non-political
advertising revenues decreased marginally to $69.2 million during
Segment's operating income inched up approximately 1% to $27.7
million, reflecting higher retransmission revenue, offset by
increased programming fee and lower political advertising
Management now expects Local Media Group's total revenue to
increase marginally, while non-political advertising revenue is
expected to increase in the low-single-digit range during the
first quarter of fiscal 2014.
Meredith's Growth Catalysts
Meredith, which competes with
Martha Stewart Living Omnimedia Inc
), boasts a strong portfolio of women's magazines, which helps it
gain market share. The company remains focused on bolstering
advertising revenues, primarily in the digital space and is
laying more emphasis on brand licensing, marketing services and
e-Commerce to make it less susceptible to economic downturns.
Meredith also remains a perfect bet for investors who are
seeking both growth and income. The company, through its TSR
(Total Shareholder Return) strategy, intends to boost
shareholders' value through dividends, share repurchases and
strategic investments in business to drive growth.
The company has a strong history of making dividend payouts
for 66 consecutive years. Over the last decade, the company has
boosted its dividend at an average annualized rate of 16% and
raised dividend annually for 20 straight years.
Moreover, the company constantly endeavors to explore and add
alternative revenue generating channels through acquisitions or
strategic alliances, which supplements its sales. Meredith
extended its contract with
Wal-Mart Stores Inc
) through 2016, which includes an expansion of the Better Homes
and Gardens branded home decor and garden program at Wal-Mart
stores across the United States and Canada.
Alongside, this Zacks Rank #2 (Buy) stock renewed its
long-term affiliation agreements with
) and Fox Broadcasting Co. We believe these measures will help
the company reduce its dependency on traditional advertising and
provide ample growth opportunities to increase its revenue
generating capabilities, thereby driving profitability.
Other Financial Details
Meredith ended the quarter with cash and cash equivalents of
$27.7 million, total debt of $350 million and shareholders'
equity of $854.3 million. In fiscal 2013, the company repurchased
1.5 million shares. The company's leverage ratio (debt to
EBITDA) was 1.3 to 1 for the 12 months period ended Jun 30,
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