Valassis reports 3rd-qtr loss, shares tumble

Valassis, which produces advertising inserts tucked into newspapers, direct mail and e-mail marketing, said it lost $5.2 million, or 11 cents per share for the three months ended Sept. 30 in contrast to a profit of $16.4 million, or 34 cents per share, in the year-ago period. Revenue fell 7 percent to $563.7 million, from $607.2 million last year.

Analysts polled by Thomson Reuters, on average, expected profit of 30 cents per share, on revenue of $603.8 million.

The company said revenue in its shared mail division fell 6 percent to $327 million, nearly halving its profit for the quarter compared with last year. Cancellations and order reductions hurt the unit.

Its neighborhood targeted products division revenue dropped 9 percent from last year to $107 million, cutting profit to by nearly three quarters from last year. A reductionn in newspaper inserts, higher expenses and a shift toward lower profit margin customers hurt results.

Revenue in its market-delivered free standing inserts segment dropped 11 percent to $91.4 million, while profit in the unit dropped 95 percent, reflecting lower prices, lower volume and higher paper prices.

Its international, digital media and services division saw revenue decline 6 percent to $38.3 million, largely because of the sale of its business in France. The segment had a loss for the quarter.

Valassis shares dropped $2.33, or 55 percent, to $1.84 in afternoon trading after sinking earlier as low as $1.78, its lowest price since it debuted on the New York Stock Exchange in 1992.