Martha Stewart Living Omnimedia (NYSE:MSO) isn't just a scary corporate moniker, it's been an absolute fright for anyone who was silly enough to put money and faith in Martha from the beginning. Click here for the gory details.

More gory details: Let's get them out of the way, because I want to discuss something a bit more arcane with what little space we'll have left. The firm's sales were 24% lower. It blamed much of that on sales at Kmart (NASDAQ:KMRT), but the drop was across the board. The earnings picture was even worse. By earnings, of course, I mean losses. This year's $0.30 per share nearly quadruples last year's $0.08 in red ink.

What does the firm offer investors who have bid the stock up more than 60% during the past three months? Optimism. You read me right, optimism. It thinks ad sales will pick up once Martha gets out of the clink in the spring of 2005. Maybe, but I sure wouldn't bet my money on it. And what about her upcoming prime time show? I'm not sure it will matter much now that every channel on the cable spectrum is sporting younger, hipper home improvement.

Now that we've got that out of the way, there's an even spookier trick hidden at the back of yesterday's release. It involves an accounting change that would end the current policy of smoothing out subscriber acquisition costs across the year. Instead, they'll be expensed, as they should always have been, during the quarter in which they occur. In theory, this is more accurate accounting, and we ought to salute it. Except...

Keep your eyes peeled, folks. If you refer to the company's reconciliation table at the bottom of the release, you'll see that there's been some obvious seasonality in these subscriber acquisition costs. That means a big bath next quarter, and the firm has already braced investors for that. By reducing expenses, the accounting change will (surprise!) favor the spring and summer quarters -- exactly the quarters for which management is making vague, rosy predictions. Convenient, eh?

Don't be tricked. This is no treat. If next year's Q1 and Q2 look a bit too shiny and bright, make sure you're comparing earnings to the restated results, not those originally reported.

This is not a McDonalds (NYSE:MCD) or Home Depot (NYSE:HD) type turnaround folks. Heck, it's not even Intel (NASDAQ:INTC) today. This firm's got everything riding on Martha's return to grace. Why bet your hard-earned cash on that? Even if she's not laughed off the tube, who's to say her star power can still deliver revenue? The risk here far outweighs the potential rewards, and that, my friends, is a bad thing.

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Seth Jayson wishes there were something good to write about Martha or her company. At the time of publication, he had positions in no company mentioned. View his stock holdings and Fool profile here. Fool rules are here.