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Meredith Corporation (MDP - Analyst Report) is slated to report its second-quarter 2012 financial results on January 24, 2012. The current Zacks Consensus Estimate for the quarter is 67 cents a share. The Zacks Consensus estimates revenues to come in at $343 million.

Recap of First-Quarter 2012

Meredith Corporation posted better-than-expected first-quarter 2012 results on the heels of modest demand for non-political advertising at its Local Media groups, increased readership and online traffic and effective cost management.

The quarterly earnings of 48 cents a share outpaced the Zacks Consensus Estimate of 46 cents, but fell 15.8% from 57 cents delivered in the prior-year quarter.

Management now expects earnings in the range of 65 cents to 70 cents for the second quarter of fiscal 2012. For fiscal 2012, the company stood by its earlier guidance and expects earnings in the range of $2.40 to $2.80 per share.

Total revenue for the quarter dropped 4.3% year over year to $327.9 million, reflecting a 10% decline in total advertising revenue, partially offset by a 1% and 7% increase in circulation and other revenue. However, total revenue came ahead of the Zacks Consensus Estimate of $326 million.

Zacks Consensus Projections for Second Quarter

The analysts considered by Zacks, expect Meredith to post second-quarter 2012 earnings of 67 cents a share. The current Zacks Consensus Estimate reflects a decline of 23.9% from the prior-year quarter’s earnings. The current Zacks Consensus Estimate for the quarter ranges between 66 cents and 70 cents.

Zacks Agreement & Magnitude

Of the six analysts following the stock, none of the analysts revisited their estimates in the last 7 or 30 days, thereby keeping the Zacks Consensus Estimate unchanged.

Positive Earnings Surprise History

With respect to earnings surprises, Meredith has topped the Zacks Consensus Estimate over the last four quarters in the range of 2.3% to 4.4%. The average remained at 3.2%. This suggests that Meredith has outperformed the Zacks Consensus Estimate by an average of 3.2% in the trailing four quarters.

Price Stats

Since its last earnings release on October 26, 2011, Meredith’s market price has increased 18.2% to $31.97 as of January 20, 2012. During trading hours on January 20, the stock reached an intra-day low of $31.17 and an intra-day high of $32.09. Currently, the stock price is within its 52-week low-high range of $21.10 (attained on October 4, 2011) and $36.29 (achieved on February 18, 2011),. From October 26, 2011 to January 20, 2012, the stock dropped to a low of $26.03 on November 9, 2011 and rose to a high of $33.74 on January 3, 2012.

Meredith in Neutral Lane

Meredith is one of the leading media and marketing companies engaged in publishing, broadcasting, integrated marketing and interactive media. The company boasts a strong portfolio of women’s magazines with a relatively stable circulation, which has helped it to gain market share. We observe that more than half of the company’s revenue comes from advertising, which depends upon the health of the economy. Therefore, both publishing and broadcasting revenues run the risk of being hurt by fall in advertising demand.

Meredith has been working diligently to explore and add significant revenue generating alternative opportunities in order to reduce its dependency on traditional advertising by entering into strategic alliances. These include expansion of its integrated marketing offers, video related operations, brand licensing, and mobile initiatives.

Meredith has also been actively managing its cash flows, returning much of its free cash to shareholders through dividends and share repurchases. The company has been paying dividend continuously since 1947, and has been increasing it for the last 19 consecutive years. During the first quarter of 2012, the company raised its dividend by 50% to $1.53 from $1.02. Additionally, the company also announced a $100 million share repurchase program.

Currently, we maintain a long-term ‘Neutral’ recommendation on the stock. Moreover Meredith, which competes with Martha Stewart Living Omnimedia Inc. ((MSO - Snapshot Report), holds Zacks #2 Rank that translates into a short-term ‘Buy’ rating.

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