Martha Stewart Firm Posts Wider Loss

Oct 27, 2005  •  Post A Comment

Martha Stewart Living Omnimedia reported Thursday that its third-quarter loss widened to $26.1 million from year-earlier red ink of $15 million, hurt by $10.8 million in charges related to stock options paid to “The Apprentice: Martha Stewart” executive producer Mark Burnett.

The wider loss came as the company rebounded on the revenue side, posting a 6 percent increase in revenue to $40.9 million on the strength of the company’s television and publishing units.

The TV division saw its revenue surge 54 percent to $3.4 million, reflecting the first three weeks of the company’s new syndicated daily talk show “Martha.” However, the show’s production costs also contributed to a wider operating loss of $3.5 million, compared with operating red ink of $1.8 million a year ago.

Despite the improved revenue performance, company officials acknowledged in their earnings release that “Martha” has missed ratings projections thus far, and that the show is undergoing adjustments to improve ratings.

The news sent MSO shares tumbling more than 13 percent in late-morning trading to $18.29 a share.