Time Inc. Swings to Quarterly Loss in First Report as Standalone Company

Joseph A. Ripp Headshot - P 2013
Courtesy of Time, Inc.

Joseph A. Ripp Headshot - P 2013

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.

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"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.”

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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.

Email: Georg.Szalai@THR.com
Twitter: @georgszalai