Time Inc is the parent company of not only Time magazine, but also Entertainment Weekly, People, and Fortune magazines. On Tuesday, the conglomerate reported its second-quarter financials were lower than they expected. Furthermore, they are now targeting to hit a cost savings total in excess of $400 million through several strategies. Most of this plan should be implemented over the next year-and-a-half.
CEO Rich Battista leads this umbrella company as well as the plan, which he says will use part of the savings from a “Strategic Transformation Program” to “invest in our future in key growth areas.” This could include both native and branding content as well as data and targeting and, of course, paid products and services and brand extensions.
“The third quarter represents an important turning point for the company as we are seeing strong momentum and sequential improvement of year-over-year trends for total advertising revenues,” Battista commented. And with this program, he says, the company envisions “a path to a minimum range of $500 million to $600 million of adjusted operating income before depreciation and amortization within the next three to four years.”
Looking more closely at the numbers, Time Inc reported a $44 million second-quarter loss. Last year, they earned $18 million in the same period. Adjusting for operations, the loss equates to roughly $38 million in comparison to a $50 million profit from a year ago. Overall, then, adjusted earnings fell from $22 million to $13 million.
Battista says that the coming year, then, will be one of stabilization.
“On our last earnings call,” he explains, “we outlined aggressive actions — building on what we had accomplished to date — to reduce costs, expand margins, rationalize our portfolio and extend our brands into new growth revenue streams. We’ve been moving with speed and, most significantly, we are announcing today, a strategic transformation program based on a thorough review of Time Inc.’s business. Through this review, we have greater confidence in our path to accelerate the optimization of costs and revenue growth drivers.”
In late April, the media firm chose to keep independent, even amid offers for takeovers.
In a statement, the company also advised: “Over the past several months, there has been considerable speculation and news coverage regarding interest by various parties in acquiring Time Inc. While Time Inc. had not initiated a process, the board of directors, consistent with its duties, evaluated a number of expressions of interest with the assistance of external advisors.”