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Meredith (MDP) Beats on Q1 Earnings, Maintains '17 View
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Meredith Corporation’s first-quarter fiscal 2017 adjusted earnings per share of 75 cents outperformed the Zacks Consensus Estimate of 72 cents and soared 44.2% year over year. Notably, this is the 12th straight quarter in which the company has delivered an earnings beat.
The company’s results in the reported quarter were driven by robust political advertising revenues and growth in digital advertising revenues in both the national as well as local businesses. Digital traffic increased to more than 81 million monthly unique visitors.
Digital advertising revenues surged more than 16% in fiscal 2016. National media reported a slight decline in total advertising revenues, while Local Media Group political advertising revenues jumped 26%.
Management reiterated its earnings per share guidance for fiscal 2017. The company expects earnings to be around $3.50-$3.80 per share. Further, second-quarter fiscal 2017 earnings per share are anticipated to be in the range of $1.18-$1.23 per share compared with earnings of 80 cents reported in the prior-year quarter. The second-quarter result will be driven by robust political advertising revenues. In first-half 2017, the company continues to expect political advertising revenues in the range of $40 million to $50 million.
The Zacks Consensus Estimate for the second quarter and fiscal 2017 are pegged at $1.22 and $3.69, respectively.
Total revenue for the quarter grew 4% to $399.9 million, almost in line with the Zacks Consensus Estimate of $400 million. Top-line growth was supported by a 3.3% increase in advertising revenues to $225.9 million and 12.3% growth in Other revenues to $105.3 million. On the other hand, circulation revenues dropped 4.9% to $68.7 million.
For second-quarter fiscal 2017, total revenue is anticipated to be up in the range of mid- to high-single digits.
Adjusted operating profit soared more than doubled to $60.7 million in the quarter, while margin expanded 770 basis points to 15.2%.
Segment Details
Meredith’s National Media Group revenues dipped 4.2% year over year to $247.3 million primarily due to a 9.4% decline in Other revenues to $53.3 million, 4.9% drop in circulation revenues to $68.7 million and 1.5% fell in advertising revenues to $125.4 million. The segment’s operating income totaled $24.1 million, up 5.7% year over year.
Meredith now estimates this segment’s revenues to decline in the low-single digits in second-quarter fiscal 2017.
Revenues at the company’s Local Media Group segment climbed 20.7% to $152.6 million primarily due to an increase in political advertising revenues and Other revenues. Political advertising revenues surged to $16.4 million from $2.1 million, while Other revenues jumped 48.6% to $52.1 million. On the other hand, non-political advertising revenues declined 5.7% to $84.2 million. The segment’s operating income totaled $50.6 million, soared 72.6% year over year.
Management now expects Local Media Group’s revenues to advance nearly 25% in second-quarter fiscal 2017.
Meredith ended the year with cash and cash equivalents of $32.1 million, long-term debt of $622.4 million and shareholders’ equity of $904.4 million. As of Sep 30, 2016, Meredith had $78 million remaining under its existing share repurchase authorization.
Zacks Rank and Stocks to Consider
Meredith currently has a Zacks Rank #3 (Hold). Better-ranked stocks worth considering include Time Inc. (TIME - Free Report) , New Media Investment Group Inc. and Nexstar Broadcasting Group, Inc. (NXST - Free Report) .
Time has surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average estimate of 10% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
New Media Investment Group has topped the estimate in the trailing four quarter, with an average estimate of 7.5% and currently has a Zacks Rank #2 (Buy).
Nexstar Broadcasting Group has long-term earnings growth rate of 6.5% and also carries a Zacks Rank #2.
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Meredith (MDP) Beats on Q1 Earnings, Maintains '17 View
Meredith Corporation’s first-quarter fiscal 2017 adjusted earnings per share of 75 cents outperformed the Zacks Consensus Estimate of 72 cents and soared 44.2% year over year. Notably, this is the 12th straight quarter in which the company has delivered an earnings beat.
The company’s results in the reported quarter were driven by robust political advertising revenues and growth in digital advertising revenues in both the national as well as local businesses. Digital traffic increased to more than 81 million monthly unique visitors.
Digital advertising revenues surged more than 16% in fiscal 2016. National media reported a slight decline in total advertising revenues, while Local Media Group political advertising revenues jumped 26%.
Management reiterated its earnings per share guidance for fiscal 2017. The company expects earnings to be around $3.50-$3.80 per share. Further, second-quarter fiscal 2017 earnings per share are anticipated to be in the range of $1.18-$1.23 per share compared with earnings of 80 cents reported in the prior-year quarter. The second-quarter result will be driven by robust political advertising revenues. In first-half 2017, the company continues to expect political advertising revenues in the range of $40 million to $50 million.
The Zacks Consensus Estimate for the second quarter and fiscal 2017 are pegged at $1.22 and $3.69, respectively.
Revenues and Margins
Total revenue for the quarter grew 4% to $399.9 million, almost in line with the Zacks Consensus Estimate of $400 million. Top-line growth was supported by a 3.3% increase in advertising revenues to $225.9 million and 12.3% growth in Other revenues to $105.3 million. On the other hand, circulation revenues dropped 4.9% to $68.7 million.
For second-quarter fiscal 2017, total revenue is anticipated to be up in the range of mid- to high-single digits.
Adjusted operating profit soared more than doubled to $60.7 million in the quarter, while margin expanded 770 basis points to 15.2%.
Segment Details
Meredith’s National Media Group revenues dipped 4.2% year over year to $247.3 million primarily due to a 9.4% decline in Other revenues to $53.3 million, 4.9% drop in circulation revenues to $68.7 million and 1.5% fell in advertising revenues to $125.4 million. The segment’s operating income totaled $24.1 million, up 5.7% year over year.
Meredith now estimates this segment’s revenues to decline in the low-single digits in second-quarter fiscal 2017.
Revenues at the company’s Local Media Group segment climbed 20.7% to $152.6 million primarily due to an increase in political advertising revenues and Other revenues. Political advertising revenues surged to $16.4 million from $2.1 million, while Other revenues jumped 48.6% to $52.1 million. On the other hand, non-political advertising revenues declined 5.7% to $84.2 million. The segment’s operating income totaled $50.6 million, soared 72.6% year over year.
Management now expects Local Media Group’s revenues to advance nearly 25% in second-quarter fiscal 2017.
MEREDITH CORP Price, Consensus and EPS Surprise
MEREDITH CORP Price, Consensus and EPS Surprise | MEREDITH CORP Quote
Other Financial Details
Meredith ended the year with cash and cash equivalents of $32.1 million, long-term debt of $622.4 million and shareholders’ equity of $904.4 million. As of Sep 30, 2016, Meredith had $78 million remaining under its existing share repurchase authorization.
Zacks Rank and Stocks to Consider
Meredith currently has a Zacks Rank #3 (Hold). Better-ranked stocks worth considering include Time Inc. (TIME - Free Report) , New Media Investment Group Inc. and Nexstar Broadcasting Group, Inc. (NXST - Free Report) .
Time has surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average estimate of 10% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
New Media Investment Group has topped the estimate in the trailing four quarter, with an average estimate of 7.5% and currently has a Zacks Rank #2 (Buy).
Nexstar Broadcasting Group has long-term earnings growth rate of 6.5% and also carries a Zacks Rank #2.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>