Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Martha Stewart Living OmniMedia, Inc. Jumped

By Jeremy Bowman – Feb 25, 2014 at 3:48PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Is this meaningful or just another movement?

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Martha Stewart Living OmniMedia (MSO.DL) were looking distinguished today, gaining as much as 15% after a solid fourth-quarter earnings report.

So what: The media company said profits jumped to $0.12 from $0.02 a share, ahead of the consensus, also at $0.02. Revenues, however, declined 16% to $47.4 million, though that still beat expectations at $47.4 million. The company saw sales drop 20% in its publishing division to $28.4 million, and broadcasting revenue was nearly erased after it exited that industry last year. Merchandising revenue, however, improved 12% to $18.2 million, giving the company signs of life. 

Now what: Recently instated CEO Dan Dienst noted important steps the company made at the end of 2013 to align its cost structure, among them laying off 100 employees and slashing its print title count from four to two, and those steps seem to be paying off. For the full year, its net loss narrowed from $0.83 a share to just $0.03 a share. The company did not provide guidance, and I'd still be skeptical that it can complete a full turnaround despite the positive steps it's taken. Analysts expect essentially flat revenue growth for 2014, and a loss of $0.06 a share.

Jeremy Bowman has no position in any stocks mentioned, and neither does The Motley Fool. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Martha Stewart Living Omnimedia, Inc. Stock Quote
Martha Stewart Living Omnimedia, Inc.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.