Time Profit Beats Estimates as Costs Fall

Reuters

Magazine publisher Time Inc reported a quarterly profit that handily beat market expectations on Tuesday as lower costs more than made up for weak print ad sales.

Time has been cutting costs, including slashing its workforce, to counter falling ad sales in its print business, which includes People, Sports Illustrated and Time magazine, as more companies choose to advertise online.

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Like many traditional publishers, Time Inc - which was spun off from Time Warner Inc in June 2014 - has been struggling as more people read news on smartphones and tablets.

While publishers are aggressively shifting to the Web, most of them have failed to make enough money from digital content.

Time has been beefing up its digital services, but more than 80 percent of its ad sales still come from print.

Advertising revenue fell 8.9 percent to $420 million, while circulation revenue, which includes sales of magazines through subscriptions and newsstand sales, fell 1.6 percent to $254 million.

Print ad revenue fell 11 percent, while revenue from the company's digital services rose 4 percent.

The company said editorial and production costs fell 10 percent in the second quarter, helped partly by a strong dollar.

Restructuring and severance costs dropped 78 percent, while selling, general and administrative costs fell 5.7 percent.

The company recorded a net profit of $24 million, or 22 cents per share, compared with a net loss $32 million, or 30 cents per share, in the same period last year.

Excluding items, Time earned 27 cents per share. Total revenue fell 5.7 percent to $773 million.

Analysts on average had expected a profit of 15 cents per share and revenue of $758 million, according to Thomson Reuters I/B/E/S.

(Reporting by Abhirup Roy and Sai Sachin R in Bengaluru; Editing by Ted Kerr and Saumyadeb Chakrabarty)