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Meredith (MDP) Continues to Restructure, Offloading MXM

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In keepingwith its strategy to focus on core operations, Meredith Corporation has decided to offload Meredith Xcelerated Marketing (“MXM”) to Accenture. Management believes that this digital and customer relationship marketing agency will better integrate with Accenture Interactive. MXM is a creative agency, which develops and delivers custom content and customer relationship marketing programs for many of the world's leading brands.

The company did not disclose the financial terms of the transaction. This Zacks Rank #1 (Strong Buy) company believes that the deal will not have any major impact on its fiscal 2018 financial results.

The news of divestiture followed Meredith’s announcement of new sales and marketing structure for its National Media Group and strategic plans to smoothly integrate its recent buyout of Time Inc. This strategy mainly involves the reviewing of media asset portfolio and divestiture of non-core brands; augmenting advertising as well as circulation feat of the Time Inc. properties; increasing revenue and profits of Time Inc. digital assets; and generating cost synergies of $400-$500 million annually in the first two years of operations.

 

On completion of portfolio review, Meredith intends to vend the TIME, Sports Illustrated, Money and Fortune magazine brands. This follows the recent divestiture of Time Inc. UK and Golf media brands. Meredith, which records 175 million American consumers every month, sold Time Inc. UK to Epiris.

Analysts believe that these endeavors will provide cushion to the stock that has declined 17.4% in the past three months against the industry’s gain of 15.2%.

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MSG Networks Inc. delivered a positive earnings surprise of 20.4% last quarter.  It sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

AMC Networks Inc. (AMCX - Free Report) has pulled off an average positive earnings surprise of 24.3% in the trailing four quarters. The company carries a Zacks Rank #2 (Buy).

Discovery Communications, Inc. , a Zacks Rank #1 stock, has a long-term earnings growth rate of 8.8%.

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