Amidst Meredith’s transformation and reorganization, the media company reports total revenue of $708.6 million for the first quarter of fiscal year 2022 a modest 2% increase year-over-year. Net earnings were $24.8 million, or $0.51 diluted earnings per share, compared to $42 million for the same period last year, a 41% decrease. These figures reflect the results from three reporting segments of Meredith’s business: digital, magazine and local media.
Meredith chairman and CEO Tom Harty commented on the company’s results for the period ended September 30, 2021.
“We delivered total company revenue growth, as continued record digital performance and stronger non-political advertising and magazine consumer revenues overcame historically high political advertising revenues in the prior year,” said Harty in an October 28, 2021 news release. “Our digital performance reflects strength across the board, including advertising, licensing, and digital consumer driven sources such as performance marketing and content commerce.”
Quarterly highlights
Meredith reported the following quarterly highlights:
- Digital revenue grew 24% to $200 million, driven by 29% growth in digital advertising.
- Digital consumer revenue grew 24%, driven by Apple News+ and performance marketing through retail partners including Walmart, Amazon and Target.
- Magazine revenue decreased 2% to $305 million.
- Magazine consumer related revenue, which represents two-thirds of segment revenue, increased 6%, due primarily to newsstand and subscription revenue.
- Magazine revenue decreased because certain categories (food, prescriptions and beauty) continue to be affected by the economy, work-from-home growth and supply chain problems.
- Local Media Group revenues decreased 7% to $209 million due, in part, to lower political advertising spend. Non-political spot advertising revenue increased 24%.
Updates on upcoming sales of business divisions
In the earnings report, Meredith provided an update on the sale of their broadcast division to Gray TV which started earlier this year. The sale is expected to close during the calendar year. After upping its original $2.7 billion offer, Gray TV agreed to pay $2.825 billion for Meredith’s broadcast business. Shareholders will receive $16.99 per share once the deal is complete.
Announced in early October, Meredith said they are selling their remaining operations, including their digital and magazine segments, to IAC’s Dotdash digital publishing unit for $2.7 billion. Shareholders will receive approximately $42.18 in cash per share. The new combined company will be called Dotdash Meredith.
“We are extremely proud of our 120-year history of journalistic integrity and dedication to building world class brands and consumer experiences,” Harty said. “We are focused on closing both transactions and delivering value to shareholders. Looking ahead, we are enthusiastic at the opportunity to further strengthen our brands and consumer relationships as part of Gray and Dotdash Meredith.”
Insider Take
This has been quite a year for Meredith with these two major events coming before year end. With the sale of the broadcast division to Gray TV, Gray will operate in 102 markets, reaching 25.4% of U.S. households. Together Dotdash and Meredith expect to reach more than 175 million online consumers monthly, including 95% of US women, making them one of the largest publishers in America.
