News
Getty releases 2nd quarter 2006 financials
Getty Images Inc. (NYSE: GYI) has announced the financial results for the second quarter of 2006. The company continues to be plagued by weak volume in the royalty-free image business. According to Getty CEO Jonathan Klein "We have not yet turned around royalty-free volume to our satisfaction in the United States," and further indicated that royalty-free volume for 2006 has been and may continue to be lower than the company had projected in the past. Shortly after the announcement Getty's stock price dropped 5.20 (9.42%) to 50.00 in after-hours trading; down almost 30 percent since the April 20th announcement of the Q1 2006 results. Further highlights from the announcement and conference call.
Revenue grew 10.5 percent to $204.8 million and 12.8 percent on a currency-neutral basis but fell short of many analysts expectations.
Getty Images had a second-quarter net profit of $22.3 million (35 cents per share). Q2 2005 was $34.0 million (53 cents pre share). Excluding a $17.9 million charge for stock-based compensation, a non-cash loss on subleased property in New York and the loss on the sale of short-term investments, its profit was 64 cents per share.
Cash provided by operating activities was $55.4 million for the quarter
Acquisitions of Stockbyte, a leading, wholly-owned royalty free collection, and Laura Ronchi S.p.A, the Company’s largest master delegate, were completed during the quarter
Getty reported strong growth in Asia and particularly noted that Japan was up 50%.
Jonathan Klein stated in the conference call that after purchasing iStockphoto the company determined that only 8% of iStockphoto’s customers overlapped with the Getty Images customer base. A claim that supports the assertion that micro-payment sites primarily appeal to a new stock photo customer and represent a relatively small amount of cannibalization from its other RF product offerings.
Jonathan Klein acknowledged that alternative licensing models will have an impact on RF sales and underscored that much of the growth in the industry has come from new licensing models that have opened up image licensing to a more diverse range of customers. Klein hinted that Getty Images has been working on further innovation and will announce new licensing models in the near future that differ from the current offering of RM, RF, Subscription, and Micro-payment.
For the third quarter of 2006, Getty Images is forecasting revenue of $205 million to $210 million and earnings per share of 64 cents to 66 cents. For 2006, the company estimates revenue in the range of $820 million to $830 million, and earnings per share of $2.63 to $2.70. The outlook for full-year earnings excludes about 16 per cents per share for stock-based compensation and a total of around 25 cents per share for the loss on subleased property in New York, and loss on the sale of short-term investments.
Click here to view the original press release.
Related stories:
Getty hires Thomas Oberdorf to replace outgoing CFO (May 31, 2006)
Getty announces increase to stock repurchase program (May 25, 2006)
Getty Posts Improved Sales, Flat EBITDA for 1Q '06, Stock Declines (April 24, 2006)
Getty Images acquires Stockbyte for $135 million (April 6, 2006)
Getty releases Q4 2005 numbers (January 27, 2006)
Liz Huebner retiring as CFO of Getty Images (December 9, 2005)
Getty reports revenue growth of more than 20% for Q3 2005 (October 21, 2005)
Posted in: News, Stock Photo Companies
Comments(1)
post a comment »Pino Granata, August 01, 2006 [#]
“The strange case of the photo business”
I’ve never seen anything like it’s happening with our business. For different reasons the value of the pictures it’s closed to zero.I remember years ago in Italy all the photo agencies went on kind of strike in order to increase the price of the pictures and to get some rights from the publishers. These rights included research fees, credit to the photographers and agencies and fees for republishing pictures. The action was very successful at the point that we got a contract signed by the publishers. I remember the comment of one of the owners of an agency: “it’s like we have gas and the publishers need pictures as cars need gas to make them running.Now what we can see is that the pictures supply is so high that the value of the pictures is decreased in a way that is possible to buy one picture for less than 50 cents. No wonder that the rf pictures are underscoring. We have reached the lowest point ever, maybe, and it is right to wonder where we are going. At this point I wonder how many people are eager to invest in the photo business.There is no hope for growth and the fact the Getty shares have lost 30% since April must alarm everybody in the business. Maybe it’s time to talk very seriously about the future of photography and having the people who know and live of photography to take care of our business.