Tuesday, Media and marketing services company Valassis Communications Inc. (VCI), reported a huge loss for the fourth quarter, hurt by a hefty impairment charge that represents a decrease in market value of the company's business. In addition, the company reaffirmed its full year 2009 outlook.
The Livonia, Michigan-based company's net loss for the fourth quarter was $222 million or $4.63 loss per share, compared to net income of $20.55 million or $0.43 per share in the previous year quarter.
The fourth quarter results included $245.7 million pre-tax, non-cash impairment charge related to goodwill and other intangible assets, representing a decrease in the market value of its business. In addition, a write-down of $4.8 million related to the company's investment in China, was also recorded.
Excluding charges, net earnings for the quarter would have been $1.4 million or $0.03 per share. Five analysts polled by Thomson Reuters expected earnings of $0.26 per share for the quarter. Analysts' estimates usually exclude one-time items.
Revenue for the quarter declined 5.3% to $626.25 million from $661.49 million in the last year quarter. Analysts estimated revenue of $614.56 million for the quarter.
Operating loss was $206.18 million compared to an operating income of $49.30 million in the year-ago quarter. Total costs and expenses rose 36% to $832.43 million from $612.18 million in the last year quarter.
For the full year 2008, net loss was $207.49 million or $4.32 loss per share compared to net income of $58 million or $1.21 per share last year. Revenues increased to $2.38 billion from $2.24 billion in the previous year.
Looking forward, the company said that it continues to see declines in client marketing budgets due to adverse economic conditions. Based on current forecasts, the company is reiterating its earlier guidance.
For the full year 2009, the company expects earnings of $36.2 million. The company said it assumes a mid-single digit decline in revenue in the first half of 2009 and flat to slightly down revenue in the second half of 2009, resulting in an adjusted EBITDA of approximately $215.0 million.
"Our 2009 Profit Maximization Plan is on track to reach its total cost savings goal of $50 to $60 million for 2009," said Robert Recchia, Valassis executive vice president and chief financial officer.
VCI is currently trading at $1.39 down $0.08 or 5.44% on a volume of 23,360 shares on the NYSE.
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