Time Inc. Swings to Quarterly Loss in First Report as Standalone Company
UPDATED: Time Warner spun off the magazine company, led by CEO Joseph Ripp, in June.
Magazine giant Time Inc. on Tuesday reported a second-quarter loss of $32 million, compared with a year-ago profit of $75 million, in its first report as a standalone company following its spin-off from Time Warner.
Adjusted for various items, including severance and restructuring charges, the company posted earnings of $33 million, down from $76 million.
The company, led by chairman and CEO Joseph Ripp, also posted revenue of $820 million, down from $833 million in the year-ago period.
Time Inc. owns such magazine brands as Time magazine, Fortune, Sports Illustrated, People and Entertainment Weekly.
"On June 6, we completed our separation from Time Warner. We are once again an independent public company, for the first time since January 1990,” said Ripp. "Time Inc. is undergoing a significant transformation as we extend our powerful brands across platforms, work to develop adjacent business opportunities and move toward a leaner and more nimble operating culture."
He added: "We had a solid second quarter, we are making real progress, and we are executing. However, we still face secular challenges, and we are in the early innings of driving change.”
Advertising revenue increased 3 percent in the second quarter to $461 million. Excluding the impact of an acquisition and the exit from the CNNMoney.com partnership, ad revenue declined 3 percent. Circulation revenues, which are comprised of subscription, newsstand and other circulation revenue, declined 5 percent to $258 million.
Subscription revenue fell 2 percent to $171 million, with newsstand revenue dropping 13 percent to $83 million.
On an earnings conference call, Ripp said that the spin-off was important because when Time Inc. was part of Time Warner, other units were always the "primary focus of management and investors." But management also said the spin-off was a real distraction for a while.
Ripp said the company was continuing to look at cost control opportunities and would explore potential new business opportunities along with possible acquisitions. He said: "We are not going to be buying $500 million things that don't make a nickel, which is what is a lot of what it available out there these days."
Management also said that it would soon announce the hiring of an executive who will focus on M&A opportunities and strategy issues.