Getty Images cuts outlook for year, will chop 100 jobs
Seattle Times technology reporter
Getty Images' second-quarter financial results, released Wednesday, confirmed one thing: Its traditional stock photography business continues to be rocked by change.
The Seattle company, with large offices in London and New York, lowered its profit goals for the year, missed analyst expectations for the quarter and said it was laying off 100 employees, saving $20 million.
The cutback represents 5 percent of its 2,000 workers worldwide and less than 10 percent of its 400 employees in Seattle, said Getty spokeswoman Deb Trevino.
In addition, Jonathan Klein, Getty's co-founder and chief executive, said during a conference call Wednesday that he will move to New York and plans to hire a senior vice president of marketing who will be based there.
Trevino said the move will be temporary — nine to 12 months — and will allow Klein to be closer to Getty's large advertising and media customers while it tries to stabilize the stock photography business.
The struggles reflect the industry shift from selling high-end photographs for hundreds or thousands of dollars to an online market that offers photos, many of them taken by amateurs, for $1 to $15 apiece.
Getty also laid off a small number of employees last year. A competitor, Seattle-based Corbis, said a month ago that it was laying off 160 workers, or 15 about percent of its staff.
Getty reported second-quarter revenues of $218 million, rising 6.5 percent from $204.6 million in the year ago period.
Despite the record revenues, Klein said, sales from stock photography slid year-over-year. In addition, revenues would have dropped 2 percent had sales from acquisitions not been counted.
Getty's profit rose 45.3 percent to $33.7 million from $23.2 million a year ago, or 56 cents a share. It missed analyst estimates by 2 cents a share.
Shares fell 9 cents Wednesday, closing at $44.84. Results were reported after regular trading; in extended trading, shares fell 18 cents more.
Getty said it is addressing the industry changes through a strategy to provide photography at all levels. It offers affordable images to businesses via its iStockphoto.com unit; it also acquired punchstock.com, offering royalty-free images.
Klein also said Getty is launching a newly designed Web site at www.gettyimages.com, including a new search function.
Despite a decrease in traditional stock photo sales, Trevino said the company sees growth areas, including video and multimedia packages that bundle stills, video and audio; a music service that licenses songs from independent musicians and labels; and Getty's editorial business.
"We are making wonderful strides with some of our newer businesses, including commercial music licensing and the opportunity for growth in the consumer market while remaining focused on stabilizing our traditional creative stills business," Klein said.
Nevertheless, Getty lowered its revenue and profit expectations for 2007, estimating revenues will reach $855 million instead of $880 million, and that earnings per share will total $2.18, rather than $2.47. The new earnings estimate includes a charge of about 4 cents for restructuring costs.
Tricia Duryee: 206-464-3283 or email@example.com
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