Time Inc.'s Q3 losses narrow as digital ad sales rise
Time Inc., the nation’s largest magazine publisher, said Thursday its third-quarter loss narrowed from a year ago as an acquisition-driven increase in digital advertising sales helped offset a continued fall in print ads.
With circulation revenue also in decline, the New York-based company, which was spun off from Time Warner in 2014, posted a loss of $112 million for the quarter. That compares with a loss of $913 million a year ago, when it recorded a massive goodwill charge.
Earnings per share, after adjusting for some items, were 31 cents, a penny higher than the 30 cents estimated by analysts who were polled by S&P Global Market Intelligence.
Time Inc. also lowered its revenue outlook for 2016, saying the estimated year-over-year percentage change will be between 0% to -1%. Its previously estimated range was 0% to 1.5%.
Shares of Time Inc., whose titles include its namesake weekly news magazine, People, InStyle and Sports Illustrated, rose 4% in morning trading to $13.05.
Like other print publishers, Time Inc. has been cutting costs and eliminating jobs as it continues to steer resources to digital publishing functions. In March, the company bought digital advertising technology developer Viant, and the acquisition led to a 63% gain in digital advertising revenue, which totaled $129 million.
The increase helped mask a 10% drop in print advertising, which is still Time Inc.'s largest source of revenue. As a result, total advertising revenue jumped 5% year-over-year to $417 million.
The ceaseless decline in Time Inc.'s newsstand sales and print magazine subscription continued through the quarter. Circulation revenue was down 15% to $223 million. The company attributed the drop to a "shift in consumer preferences from print to digital media."
Company-wide revenue fell 3% to $750 million.
"I am pleased with the strong growth of our digital advertising revenues and digital audiences in the third quarter," Time Inc. CEO Rich Battista said in a statement.
Follow Paste BN business reporter Roger Yu on Twitter @ByRogerYu.