NEW YORK (TheStreet) -- Martha Stewart Living Omnimedia (MSO) rose 9.95% to $4.86, up 44 cents from its previous close of $4.42, at the close of the trading day on Tuesday after the company reported fourth-quarter earnings that surpassed analysts' expectations.
The company reported basic and diluted net income per share of 12 cents, which was 10 cents better than the Capital IQ consensus estimate of 2 cents a share. This also marked a 10-cent increase from 2 cents a share in the same period one year earlier. Revenues fell 16% year over year to $47.4 million from $56.4 million, though this still beat the consensus estimate of $45.4 million.
"As promised, we also took some aggressive and important steps in the last quarter of 2013 to align our cost structure with marketplace realities and more importantly to become nimbler, more efficient, generators of ideas, inspirations, content and product. We also promised to put to bed several pieces of notable and distracting litigation, and we did so," said CEO Dan Dienst in the company's statement. "With some of the best, brightest and most passionate employees in our business lines - all of whom have embraced our new way of chasing opportunities as One Company - we are very excited about the groundwork we will lay in 2014 for tapping our esteemed brand's fullest potential."
TheStreet Ratings team rates MARTHA STEWART LIVING OMNIMD as a "hold" with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate MARTHA STEWART LIVING OMNIMD (MSO) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 92.10% and other important driving factors, this stock has surged by 52.52% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 91.5% when compared to the same quarter one year prior, rising from -$50.88 million to -$4.30 million.
- MARTHA STEWART LIVING OMNIMD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MARTHA STEWART LIVING OMNIMD reported poor results of -$0.83 versus -$0.29 in the prior year. This year, the market expects an improvement in earnings (-$0.11 versus -$0.83).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Media industry and the overall market, MARTHA STEWART LIVING OMNIMD's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$7.28 million or 97.26% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: MSO Ratings Report