Time Inc.'s magazines are facing such "soft market conditions" that their estimated value may decline significantly this year, the company revealed in a financial statement yesterday.
The country's largest magazine publisher began 2012 with an estimated fair market value 19% higher than its book value, parent Time Warner stated in its quarterly 10-Q financial report.
"During 2012, the Publishing segment has experienced soft market conditions that have negatively impacted its operating results. If those market conditions worsen, it is possible that the book values of the Time Inc. reporting unit and certain of its tradenames will exceed their respective fair values, which may result in the Company recognizing a noncash impairment that could be material."
Decreased sales of both ad pages and newsstand copies dragged the publishing unit's first-half operating income down 60% from last year.
Lower print volumes enabled Time Inc. to decrease its production costs. But those savings were swallowed up by "higher editorial costs associated with investments in websites and tablet editions of magazines."
Time "expects that the soft market conditions associated with the Publishing segment’s worldwide newsstand sales and domestic magazine advertising revenues will continue through at least the third quarter of 2012."
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Thursday, 2 August 2012
Soft Market, Digital Investments Drag Time Inc. Down
Posted on 20:54 by Unknown
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