Summary:

While newspapers’ ad revenues continue to be depressed at the major publishers, magazines have tended to keep their collective head above wa…

Stephen Lacy, president and CEO, Meredith

While newspapers’ ad revenues continue to be depressed at the major publishers, magazines have tended to keep their collective head above water. But an advertising pullback has caused women’s magazine publisher Meredith Corp. (NYSE: MDP) to experience a slight decline. As Chairman and Chief Executive Officer Stephen Lacy explained, the National Media Group’s lower ad revenues during its FY Q311 (roughly equivalent to everyone else’s Q1) were primarily due to belt-tightening by certain advertising clients facing sharply higher commodity prices. On a positive note, the integrated marketing unit, along with licensing and local ads were all solidly up.

Specifically, the Local Media Group gained 5 percent — though that was significantly lower than the 16 percent bounce the segment got a year ago as the magazine industry emerged from the recession.

While national advertising was experiencing some weakness, the integrated marketing unit was still able to benefit from the larger shift of marketing dollars to digital. The segment was up 8 percent led by the expansion of non-traditional advertising programs in digital and customer relationship management services for national clients.

Brand licensing did even better than that, with a 15 percent increase in revenues, driven by continued expansion of Better Homes and Gardens-branded products at Walmart stores.

Overall, the National Media Group’s declines were fairly modest. Plus, it’s worth noting that last year, magazines benefited from pent up demand after two years of downward spending trends. Still, the numbers are worth watching as possible sign that the recovery maybe losing some steam amid the devastating effects of the earthquake, tsunami and nuclear disaster affecting Japan, the turmoil in the Middle East and the continued high unemployment in the U.S. So with all that in mind, the National Media Group’s numbers might not seem so bad:

– Operating profit was $48 million, compared to $51 million in the year-ago period.
— Total revenues were $270 million, compared to $285 million.
— Advertising revenues were $122 million, compared to $137 million.
— Operating expenses declined 5 percent.

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