Getty releases most recent quarter results (for the last time?)
With the company poised to go private within this calendar quarter or early in the next, Getty Images released its results for the first three months of 2008. Unless the “merger” (as the company now refers to the transaction taking Getty private) is pushed off into the next quarter, these will be the last financial figures we see from the company. Assuming these are the last figures we’ll see, the company appears to be going out with a sigh. Currency neutral revenue grow by only 4.2% in quarter, while gross, operating and profit margins all deteriorated when compared to 1Q07.
Gone, too, is the ritual quarterly conference call during which CEO Jonathan Klein and his top managers would discuss their performance and answer questions from analysts. No doubt, Mr. Klein is relieved not to have to explain to Wall Street the weak performance.
The 4.2% real growth in revenue represents the mixed results of increasing micro-stock and editorial revenue and decreasing creative stills revenue. This combination had an ill effect on the gross margin as the company pays higher commissions on micro-stock and editorial imagery relative to creative stills. The company’s gross margin declined from 74% in 1Q07 to 71% in 1Q08 as a result. Selling General and Administrative expenses also increased as a percentage of revenue due, the company says, to the cost of acquisitions, investment in areas with future growth potential, and negative foreign exchange fluctuations which combined to reduce the operating profit margin from 26% in 1Q07 to 19% in 1Q08.
In dollar terms, then, Getty earned net income of $24MM in the first quarter of 2008 on revenue of $233MM as compared to net income of $38MM on revenue of 213MM in the first quarter of the previous year. This represents a decline in the company’s net profit margin from 17.8% in 1Q07 to 10.3% in 1Q08.
Comments
Post a Comment