It has been about a month since the last earnings report for Meredith Corporation . Shares have lost about 16.4% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Meredith Posts In-Line Q3 Earnings, Maintains '17 View
Meredith posted third-quarter fiscal 2017 adjusted earnings of $0.87 per share that met the Zacks Consensus Estimate but declined 5.4% from the prior-year quarter. We note that the company reported in line earnings after registering 13 straight quarters of positive earnings surprise.
Nevertheless, management reiterated its earnings per share guidance for fiscal 2017. The company continues to expect adjusted earnings in the band of $3.85-$3.90 per share. For the fourth quarter earnings are anticipated to be in the range of $0.93-$0.98 per share. Including special items, Meredith envisions fiscal 2017 earnings between $4.13 and $4.18 per share.
Meredith’s total revenue came in at $425.4 million, up marginally 0.6% year over year and surpassed the Zacks Consensus Estimate of $419.2 million, marking the second consecutive quarter of top line beat. Meredith envisions total revenue to be up marginally in the final quarter of fiscal 2017.
Advertising revenue declined 5.2% to $210.7 million, while circulation revenue fell 0.3% to $96.3 million. However, other revenue surged 14.1% to $118.4 million. Total digital advertising revenue soared 25% in the quarter with traffic across Meredith's digital and mobile sites increased to approximately 90 million monthly unique visitors.
Strategic endeavors such as increase in digital offerings, the launch of new magazine, The Magnolia Journal, and addition of newscasts across television stations, coupled with its focus on non-advertising revenue generating avenues such as retransmission fees, brand licensing and e-commerce bode well for the stock. Meredith has brand licensing program with Wal-Mart Stores, Inc. The company also concluded the buyout of the broadcast assets of Peach TV, WPCH, in Atlanta from the Turner Broadcasting System, Inc.
Operating profit came in at $70 million, down 2.7% from the prior-year period, while operating margin contracted 50 basis points to 16.5%.
Segment Details
Meredith’s National Media Group revenue rose 0.5% to $283.4 million due to 5.2% increase in other revenue to $62.4 million, offset by a 1% decline in advertising revenue to $124.6 million and a 0.3% drop in circulation revenue to $96.3 million. The segment’s operating profit totaled $41.3 million, up 7.6% year over year.
Digital advertising revenue jumped 27% and represented 28% of total National Media Group advertising revenue. As per Publishers Information Bureau, Meredith's share of total magazine advertising revenue expanded 110 basis points to 12.1% led by robust performance of Martha Stewart Living, Allrecipes and Traditional Home.
Meredith now expects National Media Group’s fourth quarter revenue to be down marginally.
Revenues at the company’s Local Media Group segment climbed 0.8% to $142.1 million. Non-political advertising revenues declined 7.1% to $84.5 million. Political advertising revenue came in at $1.7 million, substantially down from $5.6 million in the year-ago quarter. On the contrary, other revenue jumped 26% to $55.9 million. Digital advertising revenue increased 10%.
The segment’s operating profit came in at $41.2 million, down 10.8% from the year-ago period.
Management now expects Local Media Group’s revenue to be up mid-single digits in the final quarter.
Other Financial Details
Meredith ended the quarter with cash and cash equivalents of $27.4 million, long-term debt of $568.7 million and shareholders’ equity of $972.7 million. As of Mar 31, 2017, Meredith had $70 million remaining under its existing share repurchase authorization. The company generated cash flow from operations of $178 million in the first nine months of fiscal 2017.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Meredith Corporation Price and Consensus
VGM Scores
At this time, Meredith's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with a 'D'. The stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
The stock has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Meredith (MDP) Down 16.4% Since the Last Earnings Report?
It has been about a month since the last earnings report for Meredith Corporation . Shares have lost about 16.4% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Meredith Posts In-Line Q3 Earnings, Maintains '17 View
Meredith posted third-quarter fiscal 2017 adjusted earnings of $0.87 per share that met the Zacks Consensus Estimate but declined 5.4% from the prior-year quarter. We note that the company reported in line earnings after registering 13 straight quarters of positive earnings surprise.
Nevertheless, management reiterated its earnings per share guidance for fiscal 2017. The company continues to expect adjusted earnings in the band of $3.85-$3.90 per share. For the fourth quarter earnings are anticipated to be in the range of $0.93-$0.98 per share. Including special items, Meredith envisions fiscal 2017 earnings between $4.13 and $4.18 per share.
Meredith’s total revenue came in at $425.4 million, up marginally 0.6% year over year and surpassed the Zacks Consensus Estimate of $419.2 million, marking the second consecutive quarter of top line beat. Meredith envisions total revenue to be up marginally in the final quarter of fiscal 2017.
Advertising revenue declined 5.2% to $210.7 million, while circulation revenue fell 0.3% to $96.3 million. However, other revenue surged 14.1% to $118.4 million. Total digital advertising revenue soared 25% in the quarter with traffic across Meredith's digital and mobile sites increased to approximately 90 million monthly unique visitors.
Strategic endeavors such as increase in digital offerings, the launch of new magazine, The Magnolia Journal, and addition of newscasts across television stations, coupled with its focus on non-advertising revenue generating avenues such as retransmission fees, brand licensing and e-commerce bode well for the stock. Meredith has brand licensing program with Wal-Mart Stores, Inc. The company also concluded the buyout of the broadcast assets of Peach TV, WPCH, in Atlanta from the Turner Broadcasting System, Inc.
Operating profit came in at $70 million, down 2.7% from the prior-year period, while operating margin contracted 50 basis points to 16.5%.
Segment Details
Meredith’s National Media Group revenue rose 0.5% to $283.4 million due to 5.2% increase in other revenue to $62.4 million, offset by a 1% decline in advertising revenue to $124.6 million and a 0.3% drop in circulation revenue to $96.3 million. The segment’s operating profit totaled $41.3 million, up 7.6% year over year.
Digital advertising revenue jumped 27% and represented 28% of total National Media Group advertising revenue. As per Publishers Information Bureau, Meredith's share of total magazine advertising revenue expanded 110 basis points to 12.1% led by robust performance of Martha Stewart Living, Allrecipes and Traditional Home.
Meredith now expects National Media Group’s fourth quarter revenue to be down marginally.
Revenues at the company’s Local Media Group segment climbed 0.8% to $142.1 million. Non-political advertising revenues declined 7.1% to $84.5 million. Political advertising revenue came in at $1.7 million, substantially down from $5.6 million in the year-ago quarter. On the contrary, other revenue jumped 26% to $55.9 million. Digital advertising revenue increased 10%.
The segment’s operating profit came in at $41.2 million, down 10.8% from the year-ago period.
Management now expects Local Media Group’s revenue to be up mid-single digits in the final quarter.
Other Financial Details
Meredith ended the quarter with cash and cash equivalents of $27.4 million, long-term debt of $568.7 million and shareholders’ equity of $972.7 million. As of Mar 31, 2017, Meredith had $70 million remaining under its existing share repurchase authorization. The company generated cash flow from operations of $178 million in the first nine months of fiscal 2017.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Meredith Corporation Price and Consensus
Meredith Corporation Price and Consensus | Meredith Corporation Quote
VGM Scores
At this time, Meredith's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with a 'D'. The stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
The stock has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.