Meredith Corp. on Jan. 25 reported fiscal second-quarter revenues of $442.6 million, up 9% year over year, as local political advertising revenues helped to offset a decline in traditional print advertising, executives said.
The earnings results were released a day after the company announced a renewed CBS (US) station affiliate deal covering WGCL in Atlanta; KPHO in Phoenix; KCTV in Kansas City, Mo.; and WNEM in Flint, Mich., as well as continuing access to CBS All Access, the network's subscription live-streaming and video-on-demand platform. The agreement also covered participation in Hulu LLC's live multi-channel digital TV service.
"As we went into our negotiations with CBS, it became very important we locked down our network affiliations in those markets," said Paul Karpowicz, the president of Meredith's Local Media Group, on an earnings conference call Jan. 25. "With Hulu, at this point the economics are such that we don't anticipate having to take our retransmission numbers down at all, and have the ability to add additional revenue based on how the Hulu subscribers grow."
The company's total advertising revenues increased 11% year over year, to $267.1 million, while political advertising revenues grew 37%, to $40.1 million, thanks to an election year that featured several contentious "down ballot" races, Meredith executives said. Political advertising generated revenues of $56.4 million in the first half of the company's fiscal 2017, which ended Dec. 31, 2016.
The company's traffic on mobile and web platforms also grew to an average of nearly 90 million unique visitors per month. Meredith's print circulation revenue for the quarter ended Dec. 31, 2016, increased slightly to $66.8 million from $66.4 million in the same quarter a year earlier.
Meredith reported fiscal second-quarter net earnings of $71.8 million, or $1.58 per share, compared with $32.5 million, or 72 cents per share, in the prior-year period. Excluding special items, the company reported fiscal second-quarter EPS of $1.30, up from 80 cents in the prior-year period.
The consensus GAAP EPS estimate for the 2017 second fiscal quarter was $1.19, according to S&P Capital IQ. The normalized consensus estimate was $1.20.
Asked if Meredith executives had any predictions about how the Trump administration would impact business, CFO Joe Ceryanec said the company would "very much welcome" a lowering of the corporate tax rate, as Trump has repeatedly promised to facilitate. Karpowicz, the company's local media president, also speculated that any GDP growth as a result of the administration's initiatives could spark increased advertising spending.
Looking forward, the company said it expects fiscal third-quarter earnings per share to range from 75 cents to 80 cents, while total revenues for its local and national media groups could be flat to down slightly. Shares of Meredith were up more than 9% as of midday trading Jan. 25.