Citing the financial hit it took over sweepstakes, Reader’s Digest Association Inc., reported a sharp decline in second-quarter earnings.
The Pleasantville, NY, direct marketer and publisher reported a loss of $21.9 million for the quarter ended June 30, compared with earnings of $17 million for the same period last year.
Revenue for the quarter was $544 million, a 3% decline from $560 million for the quarter ended June 30, 2000.
The company largely attributed these results to changes to sweepstakes promotions after it agreed to pay $8.2 million to settle charges by several states and Washington, D.C. that its sweepstakes campaigns misled consumers. The company used sweepstakes to sell magazine subscriptions, books, audio and videotapes.
For the fiscal year ended June 30, the company reported net income of $132.1 million, a 9% decline from net income of $144.7 million for the previous year.
Revenue of $2.5 billion increased 1% from $2.48 billion in fiscal 2000.
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