Martha Stewart Living Omnimedia Inc. on Wednesday posted its first quarterly profit in two years, helped by Martha Stewart’s syndicated television show and magazine advertising gains. The shares rose their most in almost nine months.
Fourth-quarter net income was $2.95 million, or 6 cents a share, after a net loss of $7.33 million, or 15 cents a share, a year earlier, the New York- based company said.
Sales rose 40 percent to $84.5 million, topping the company’s $80 million forecast.
The results show signs that chief executive Susan Lyne is regaining the confidence of advertisers after founder Martha Stewart’s obstruction-of-justice conviction prompted them to pull ads. Sales in the magazine unit gained 57 percent, and Lyne is fueling new markets with a line of crafts products and investments in the company’s website.
“Things are definitely working well,” said Robert Routh, an analyst at Jefferies & Co. in New York who rates the shares “buy” and said he doesn’t own them. “Susan Lyne knows what she’s doing. You have to value the stock on the future, not on the past.”
Martha Stewart shares rose $2.39 to $18.88 in New York Stock Exchange composite trading. They had fallen 5.4 percent this year before Wednesday.
“Publishing will be driving an enormous amount of our growth this year,” Lyne said in an interview.
Sales this year may increase more than Routh expected, and he said the company’s forecast loss is lower than his $12.8 million estimate. The company predicted a 2006 operating loss of $9 million to $11 million on revenue of $270 million to $280 million, compared with Routh’s $257.9 million revenue estimate.
