This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Martha Stewart Discovers Cable

Martha Stewart Living Omnimedia (MSO) has signed a wide-ranging cable TV-distribution deal with Discovery Communications (DISCA - Get Report).

Martha, the company's new syndicated television show, will be rebroadcast on Discovery-owned TLC. Martha will air on TLC in the early evening on the same day as the syndicated broadcast and reach nearly 90 million homes on TLC.

The companies also said Martha Stewart Living will develop a 13-part original home improvement series to air on one of Discovery's 16 U.S. networks. The partnership includes distribution of selections from Martha Stewart Living's existing library.

The deal with Discovery, which was just spun off from half-owner Liberty (L - Get Report), marks the latest in a string of high-profile linkups under chief executive Susan Lyne.

"We're thrilled that Martha will be available to television viewers in a later time period," said Lyne. "Our partnership with Discovery Communications also will give us a platform to create new lifestyle programming, while expanding the audience for our evergreen library product."

But before America gets a look at her daytime show or NBC's launch this fall of The Apprentice: Martha Stewart, Wall Street will pay close attention to second-quarter earnings at the New York media company Wednesday morning.

The bad news is that while a remarkable recovery appears on track thanks to a host of new deals, the company appears certain to post some rocky quarters in the meantime.

Last week, Standard & Poor's downgraded the stock to strong sell from sell, citing the stock's strong appreciation in the past year in spite of weak numbers at the entertainment company.

"We believe MSO's share price is unsustainably high and based on unrealistic investor expectations," said S&P media analyst Gary McDaniel in a research note. "We believe the July 27 earnings release will lead investors to a more appropriate evaluation of the company's prospects."

Indeed, though Martha Stewart's name remains ever in the headlines, profitability is barely in sight at her company, belying a $1.4 billion market capitalization. S&P sees a loss of 75 cents a share this year, even as its forecasts a 12-cent-a-share profit in the fourth quarter. "We believe MSO's fundamentals are improving, but expect EPS of just $0.01 in '06, rising to $0.58 in '07," the note reads.

The good news is how well the company has performed since its founder came back. The question now is, given the attention given Martha's reintegration into society, whether she will be able to ingratiate herself to audiences and marketers.

Martha Stewart shares jump

The Martha brand is as strong as ever, with new product pouring out of the company quicker than you can spell bundt cake. And lest we forget, this is a company that produces content and has largely stayed out of the distribution game. As long as people want to watch, read listen and buy Martha, this company should prosper under the stewardship of executives like Lyne and Cyndi Stivers. Stivers' largest responsibility is for the launch of MSO's satellite radio channel through Sirius (SIRI - Get Report) later in the fall.

On Tuesday, Martha rose 6 cents to $27.82, while Discovery rose $1.11 to $16.61.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
MSO $0.00 0.00%
DISCB $28.72 0.67%
DISCA $27.93 2.27%
L $40.15 1.18%
SIRI $3.97 0.51%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs