Meredith (MDP) - Get Report shares dropped Monday after the TV broadcaster and publisher said it was suspending its dividend and pulling its fiscal 2020 guidance as it navigates the coronavirus pandemic.
The Des Moines, Iowa, company, which owns 26 media brands including People and Better Homes & Gardens magazines, said pressure on its advertising revenue is forcing numerous cost-cutting initiatives.
"The actions we are taking do not come lightly but are necessary to strengthen our liquidity and enhance our financial flexibility," Chief Executive Tom Harty said in a statement.
Meredith will reduce the salary of Harty, executives and exempt employees. The company is also cutting production budgets and "variable expenses."
The company will also be cutting capital spending.
"Traffic to our digital properties is robust, viewership for our local news broadcasts is high, and print subscriptions remain steady," Hart said.
Consumer traffic to Meredith's digital properties grew in the high-single-digits percent for the fiscal 2020 third quarter compared with the year-earlier period. That traffic is up 40% so far in April, Meredith said.
"At the same time, the covid-19 crisis has created an extremely challenging business environment, including significant advertising campaign cancellations and delays."
The company has been decreasing its reliance on ads, raising first-half fiscal 2020 consumer revenue to 45% of total revenue from 27% a decade ago. Advertising still makes up, however, about half the company's revenue mix.
The company is scheduled to report results on May 8.
Meredith shares at last check dropped 7.5% to $13.03.