Ziff Davis Media, owner of game magazines Electronic Gaming Monthly and Games For Windows and the 1UP.com game website, has announced its fourth quarter and year end financial results, showing a 70 percent rise in profits despite a continuing loss for the Game Group.
The company's fourth quarter profits climbed to $14.3 million, a 70 percent increase over the $8.4 million reported during the same period last year. This growth was largely attributed to the company's digital businesses, which saw a substantial 144 percent increase in profit over the prior year's quarter.
The company's quarterly digital revenues increased by 24 percent, while print revenues, excluding the closed publications, decreased by 8 percent. The absence of losses from closed print publications, including Sync and ExtremeTech, as well as continuing cost reductions also figured into the company's overall improvement. Consolidated revenues for the fourth quarter amounted to $56.7 million.
For all of 2006, Ziff Davis' overall profits increased 57 percent to $27.1 million as compared to the $17.3 million in 2005. Again, this increase as driven by the company's digital businesses, which saw earnings more than double over the year. Consolidated revenues for all of 2006 totaled $181.0 million.
Looking to the company's Game Group specifically, 2006 fourth quarter revenue for the division was $11.6 million, down $2.7 million compared to the same period last year. Excluding the impact of closed publications, such as the Official U.S. PlayStation Magazine, which was discontinued
following its January 2007 issue, revenue for the game division decreased $0.4 million or 5 percent compared to the fourth quarter of 2005. The division's profits also took a hit at $1.6 million, down $1.4 million or 47 percent compared to the prior year.
According to an official statement, this decline was attributed to a decline in print advertising revenue for the Group's ongoing publications. However, the firm adds that this was “partially offset” by a considerable 76 percent growth in online revenue compared to a year ago.
Looking ahead, Ziff Davis expects to report consolidated profits for the first quarter of 2007 between $3-4 million, compared to $2.7 million reported in the first quarter of 2006.
"I'm pleased to announce strong Ziff Davis earnings for both the fourth quarter as well as full year 2006. Our investments, especially in digital media, have paid off and are yielding meaningful results," said Robert F. Callahan, chairman and CEO of Ziff Davis Holdings Inc. "Ziff's creative and hard charging teams worked diligently to drive effective results for our customers which is job #1."