Time Inc. Q2 2014 Advertising Revenue Down 7%

Posted on 5/6/2014 by Jim Pickerell | Printable Version | Comments (0)

During Time Warner’s Q1 2014 earnings call Howard Averill, Executive Vice President and Chief Financial Officer of Time Warner said advertising revenue was down 7% and subscriptions were flat.

Revenues for the company’s normal operations were down 5%, but the company benefited from the acquisition of American Express Publishing Corporation resulting an a revenue increase of 1% for the quarter.

Averill added, “Revenues also benefited from one additional issue each of People and Time compared to Q1 2013. Adjusted operating loss was $94 million and that was primarily a result of $115 million in restructuring charges in the quarter.

“To offset challenging revenue trends, the management team has been extremely focused on cost discipline and changing the way Time Inc. operates, with a goal of stabilizing the business and freeing up resources to invest in growth initiatives. And excluding the acquisition and restructuring charges, expenses fell 3% in the quarter.”

“We expect modest declines in full year adjusted operating income in 2014. And that's largely a function of continuing revenue pressure and incremental public company and stock compensation expenses that Time Inc. will incur this year.”

Time Warner expects to spin-off Time Inc. this quarter. And as part of this process, Time Inc. recently issued senior notes and senior commitments for $1.4 billion in debt and a $500 million revolver. This is consistent with the company’s plan for an initial capital structure that includes approximately $1.3 billion in net debt.

Averill concluded, “We think this will allow sufficient flexibility to both invest in the business and provide direct returns to shareholders, while also optimizing its cost of capital and delivering attractive levered equity returns to investors. So, Time Inc. has made a lot of progress and is well on its way to executing against its goals for the year and successfully making the transition to a standalone public company.”

Copyright © 2014 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of www.selling-stock.com, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  


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