24/7 Wall St.

Meredith Corp. (NYSE: MDP) may be in the midst of a buyout or merger with Time Inc. (NYSE: TIME), America’s largest magazine publisher, but Wall Street, ironically, loves the company because magazines are not its most successful business. At least that is true where it matters, which is on the bottom line.

In its most recent quarter, which ended September 30, Meredith’s fiscal first quarter, its “local media” division, which has 17 owned and operated TV stations, had sales of $153 million, 38% of all Meredith revenue. The division posted segment profit of $51 million of Meredith’s total segment profit of $74 million. Meredith operating profit was $61 million, after the subtraction of unallocated corporate expenses of $14 million.

Meredith’s local media business grew at a 21% clip in its fiscal first quarter, compared to the same quarter of 2015. Much of this was due to political advertising, which was pegged at $16 million. Very little of that will recur in the upcoming quarter. Still, the operating profits of the TV business are 33% of revenue.

The publishing side of the business is nowhere near as attractive. Segment profits were only $24 million, about 10% of revenue. These numbers would have been weaker if Meredith did not have brand licensing and business-to-business marketing services as part of the publishing division. In other words, its actual publishing results are similar to most other magazine companies, which is to say they are under pressure and historically have been falling.

In early 2016, Meredith made an unsuccessful bid for Media General, which would have increased its TV station assets. At the time, CEO Steve Lacy said he was on the lookout for more companies to buy, and at that time his proposed targets where in the television and digital sectors, according to The New York Post’s Keith Kelly. Meredith, it seems, wanted to bolster its highly profitable division. This makes sense. It is the Meredith business that Wall Street loves.