Martha Stewart Omnimedia
posted second-quarter results slightly ahead of estimates, but the company lowered its guidance for the rest of the year as concerns about Martha Stewart's
stock sale have finally begun to impact business.
Company CFO James Follo said, "Looking forward, we have begun to see some impact on our business resulting from the uncertainty relating to the investigations of Martha Stewart's stock sale. Since those investigations are still pending, our ability to provide accurate guidance is constrained."
The company said it expects to see third-quarter earnings per share of 6 cents to 7 cents, compared to the consensus estimates of 15 cents provided by Thomson Financial/First Call. For the full year, the company said its results will not meet previous guidance of 53 cents without offering a specific estimate.
In the second quarter, Martha Stewart earned $6.7 million, or 14 cents a share, up from $5.2 million, or 11 cents a share, a year ago. Excluding discontinued operations, the company earned 16 cents a share, a penny better than the First Call consensus of 15 cents.
Revenue was up 16% to $78.6 million from $67.8 million last year, with publishing revenue up 15% and advertising pages increasing 12% in the company's magazines. Television revenue rose to $7.2 million from $6.9 million, while merchandising revenue climbing 82% due to higher royalties at
In a statement, the company said, "We recognize that the investigations and related speculation and media attention surrounding a personal sale of non-company stock by Martha Stewart present challenges for our company. However, we are confident that MSO is prepared to meet them."
Shares of Martha Stewart Omnimedia closed Tuesday at $10 before the news.