With the trial about to go to jury , investors who have been treating shares of Martha Stewart Living ( MSO) like a lottery ticket on its founder's fate might soon be forced to rethink the company's fundamentals ahead of earnings due out Thursday.

The jury's verdict could still determine the company's fate: a guilty finding might permanently damage it, particularly if the former CEO goes to jail. Thursday's earnings report is primarily useful as a clue about how much of a rebuilding effort the company will face if she's acquitted, and whether it has the strength to carry on without her.

"The stock will probably go up if she's found innocent, but I don't think that's going to bring the company back," said Dennis McAlpine, who covers Martha Stewart Living as the managing partner of McAlpine Associates. "I think the company's got serious problems regardless."

McAlpine doesn't own shares in Martha Stewart Living, and his company has no investment banking business with her.

Indeed, the company's problems were clear in the first three quarters of last year, a period when it swung to a loss of 15 cents a share from year-ago earnings of 19 cents a share. Revenue plunged 19.5% in the first three quarters of last year from the same period a year earlier.

Chief among the company's troubles was a decline in advertising at Martha Stewart Living, its flagship magazine title. For all of last year the total number of advertising pages in Martha Stewart Living fell 35% from 2002, while the title's advertising revenue dropped 31%.

But the company's trouble extended beyond the magazine. Revenue from the company's syndicated television programs fell in the first nine months of last year, as did sales through its catalogs and Internet site. Meanwhile, the company's general and administrative costs surged, in part due to legal expenses related to the charges facing Stewart.

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