Martha Stewart publishing swings to profit on sales rebound

Martha Stewart Living Omnimedia Inc reported stronger-than-expected fourth quarter results, bouncing back from losses a year before and in the third quarter, thanks to stronger revenue from its broadcasting, digital and merchandising businesses. The company, which publishes Martha Stewart Living and other lifestyle magazines, reported net income $20.8m, or 37 cents a share for the fourth quarter, compared with a loss of $8m, or 15 cents a share, a year earlier and a loss of $12.1m or 22 cents per share in 2009's third quarter. Revenue rose 20 per cent to $87.6m, it said on Wednesday. The quarter showed higher sales from three of its four divisions - publishing being the lone exception. But the overall gain was partly due to a $10m recognition of royalties from Sears Holdings Corp's Kmart that was previously deferred. Shares rose as much as 11 per cent after the results, which surpassed expectations by analysts that it would post profit of 30 cents a share on revenue of $84.94m, according to Thomson Reuters I/B/E/S. The company forecast that for the first quarter advertising revenue would be flat with the prior year, Internet revenue would be "at least" flat, and broadcast sales would be down. On the New York Stock Exchange, shares were up 29 cents or 5.5 per cent to $5.61 in late morning dealings after trading as high as $5.92 earlier.