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Time misses revenue estimates as advertising sales slip
[BENGALURU] Time, the publisher of Fortune, People and Time magazines, reported a lower-than-expected quarterly revenue on Tuesday, hurt by declines in magazine sales and advertising revenue.
Circulation revenue, which accounts for nearly 30 per cent of Time's total revenue, fell 12.3 per cent to US$207 million in the second quarter ended June 30.
Advertising revenue also dipped about 12 per cent to US$374 million, driven by declines in both print and digital advertising.
New York-based Time has struggled to boost magazine subscriptions and advertising revenue as more people move online for news and entertainment and advertisers shift away from print media to digital platforms such as Google and Facebook.
"We believe our advertising revenues were negatively impacted by the public speculation about the ownership of the company and the trailing effect of the disruption from the reorganisation of our advertising sales force," the company said in a statement.
Time had come under pressure to explore a sale after activist hedge fund Jana Partners LLC unveiled a 5 per cent stake in the company last August.
Time Inc CEO Rich Battista told Reuters in April that the company was "definitely" not up for sale after reports that the company had been in discussions with Meredith Corp about a potential sale.
Time also announced a cost-cutting plan on Tuesday, targeting adjusted operating income before depreciation and amortisation of at least US$500 million to US$600 million in the next three to four years.
The company has already undertaken restructuring measures, including the elimination of 300 jobs or 4 per cent of its workforce in June.
Time reported a loss of US$44 million, or 44 US cents per share in the second quarter, compared with a profit of US$18 million, or 79 US cents per share, a year earlier.
Excluding items, the company earned 13 US cents per share, edging past analysts' average estimate of 11 US cents, according to Thomson Reuters.
Revenue fell 9.7 per cent to US$694 million, missing analysts'expectations of US$703.5 million.