Meredith's stock was hit hard with a disappointing 2020 forecast.
The publisher’s stock dropped 23 percent on Thursday to $33.68 after it reported full-year financial results that included a lower than expected forecast for 2020 and mentioned the 2018 Time Inc. acquisition has come with some unanticipated difficulties, despite an increase in the size of its business overall.
For fiscal 2020, Meredith expects total revenue of $3 billion to $3.2 billion, so on the high end of the plan, flat from fiscal 2019. While the company said it’s expecting earnings from operations of between $197 million and $212 million, it admitted that figure does not include “special items” or unexpected costs and that actual results “are difficult to predict with reasonable certainty at this time.
Tom Harty, Meredith’s chief executive officer, told analysts during a call that the 2019 fiscal year showed consumer revenue and EBITDA had actually doubled, but compared to fiscal 2017, the company’s last full year before the Time purchase. This is something of a change in tone from early this year, when Harty boasted in an internal memo of Meredith’s much expanded portfolio driving the growth of consumer and e-commerce revenue for the company. Although Meredith quickly put up for sale former Time Inc. brands Sports Illustrated, Fortune, Time and Money, it had to keep the last one for lack of interest and it took longer than initially anticipated to cut a deal for Sports Illustrated. The only former Time Inc.
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