It was a good day for Martha Stewart, the doyenne of cooking and crafts. On Wednesday, her corporate kitchen domain, Martha Stewart Living Omnimedia (NYSE:MSO), announced its results for the quarter ended Dec. 31, 2006. And solid like a Jolly Rancher they pretty much were, but with a nugget of malt concern in the middle.

Earnings for the fourth quarter were $16.2 million, or $0.31 per diluted share -- up from $2.9 million, or $0.06 per share. That's a 459% improvement, for those members of the Foolish nation who are percentage buffs. Revenues for the quarter were up 15% to $97 million, from $84.6 million in the fourth quarter of the prior year.

The company's publishing unit recorded a 5% increase in revenues, driven by more advertising pages and higher rates. However, the unit's operating loss was $2.2 million, up from a $1 million loss for the fourth quarter of 2005. At the same time, the company's broadcasting operations yielded $13.4 million in revenues, versus $11 million in 2005's final quarter. Broadcasting's operating results were break even, compared with a loss of $1 million in the prior year.

Martha Stewart Omnimedia's merchandising revenues were $35.2 million in the most recent quarter, compared to $28.1 million in the prior year's fourth quarter. Operating income from the unit totaled $29.5 million, up 28% from the comparable quarter in 2005. The Internet segment posted revenues of $5.4 million, up 24% from the $4.3 million a year earlier. Its operating income was $0.2 million, versus $0.1 million in the comparable quarter of the prior year.

The lion's share of the company's income in the quarter was tied to its merchandising arrangement with Sears Holdings' (NASDAQ:SHLD) Kmart unit. But the minimum benefits guaranteed to Omnimedia from the arrangement drop off by almost 70% to about $20 million next year. This decline has led to speculation that the company was a candidate to be taken private. On the conference call following the earnings release, however, CEO Susan Lyne maintained that there are no plans to take the company private "in any way, shape, or form."

But given that merchandising carried the company in the quarter, concern about a shrinkage in the Kmart deal clearly is warranted. As such, it was important that the company's release imparted the information, "In the coming months, we will be launching many of the new merchandising initiatives announced in 2006, including our Martha Stewart Collection of home products at (Federated's) Macy's (NYSE:FD) in late summer; our Martha Stewart Crafts line at Michaels' more than 900 art & crafts stores in May; and our Martha Stewart Colors paint program with Lowe's (NYSE:LOW) beginning in March."

And so the good ship Martha Stewart appears to be heading into new waters. I would suggest that Fools -- crafty or otherwise -- inclined toward growing companies in the media sector keep a close on the company's progress.

For related Foolishness:

Fool contributor David Lee Smith does not own any of the companies mentioned, and is all thumbs at crafts. He welcomes your questions or comments.