posted a third-quarter loss on softened revenue, especially in its international business segment. The company also provided a fourth-quarter forecast that is below analyst expectations, and said it will trim costs by $70 million in the next two years, including some job cuts.
"As we expected, the quarter proved to be a difficult one. Problems with our core business were exacerbated by further economic weakness in most parts of the world," said Thomas O. Ryder, chief executive. "To address this, we are focusing on right-sizing our international operations and reducing overhead costs throughout the organization."
The company lost $4.6 million, or 5 cents a share, in the latest quarter, including $16 million in restructuring charges and other items, compared with $16.4 million, or 16 cents a share, in the prior-year quarter.
Revenue was $563 million, up 4% from last year's $542 million. The company attributed the revenue improvement to the fourth-quarter 2002 acquisition of Reiman Media Group, which contributed $74 million to third-quarter revenue. Reader's Digest's international businesses segment, however, had revenue of $236 million, down 5% from last year, and the segment's operating profit declined by $11 million. Excluding the effect of foreign-currency translation, total revenue was flat.
Looking ahead, the company said it will reduce promotion efforts to lower risk in various international markets. This will result in revenue decreasing faster than the offset of certain cost reductions, contributing to weaker results in the near term.
For the fourth quarter, the company expects EPS of 5 cents 10 cents, excluding items. The company earned 19 cents a share in the fourth quarter of 2002; analysts expect 12 cents a share.
Shares of the Pleasantville, N.Y.-based company down 2.08% to $11.75 on Thursday.