Mini-conglom drops $26 mil while revs rise for mag
This article was updated on Oct. 28, 2005.Martha Stewart Living Omnimedia’s losses ballooned last quarter as charges from “The Apprentice” offset a rebound in advertising revenue from publishing. The domestic diva’s Gotham-based mini-conglom said losses of $26 million widened from about $15 million the year before. That included a $10.8 million non-cash charge related to the launch of poorly received reality show “The Apprentice: Martha Stewart.” MSO has no economic interest in the program but has said it’s useful to promote the brand. Total revenue rose 5.7% to $41 million, largely on robust ad revenue at flagship Martha Stewart Living magazine. MSO also faces disappointing ratings from syndicated TV talkshow “Martha” and will have to give advertisers additional commercial time (called make-goods) to cover the shortfall, CEO Susan Lyne said during a conference call. Lyne added that the company is tweaking the format at “Martha” but said show helps boost overall business, citing a 50% jump in traffic on the company’s Web site from a year ago. Online magazine subscriptions are up since September, are sales of Martha products at Kmart, she said. Publishing revenue rose 24% to $28 million. Ad pages surged 48% at Martha Stewart Living. Company projected current fourth-quarter earnings of $0.22 per share, slightly below Wall Street expectations of $0.24 per share. MSO shares have plunged by more than 30% since Stewart was released from prison this summer.