The first-quarter results for Martha Stewart Living Omnimedia Inc. (NYSE: MSO) could not have been worse. The company desperately needs a new chief executive to take both the firm and Martha Stewart herself in hand. Stewart controls the public corporation, so she would have to agree with the board to act in what is clearly her own best interests. Without a new leader, her share in Martha Stewart Living Omnimedia will be worthless.

The company reported that revenue fell from $49.8 million to $37.2 million. The quarter saw a net loss of $3.3 million, or $0.05 a share, the same as in the year-ago period. The worst numbers were for publishing, the largest division. Revenue fell from $30.8 million to $24.5 million. Revenue in the broadcasting operation was also pound down from $5.4 million to $1.2 million. Some of the drop in revenue had to do with a restructuring under which some of the firm’s media assets were sold. The bottom line showed that the actions did not result in any financial progress.

Dan Taitz, Interim Principal Executive Officer, was bold enough to make the results seem palatable, which cannot possibly be the case:

First quarter results were a bit better than expected on the bottom line but overall in line with our plans as we position MSLO for the future. Our restructured Publishing business delivered solid digital advertising growth and reduced expenses. Our Merchandising business is performing as anticipated and we recently began offering initial products in JC Penney stores and on jcp.com. Overall we remain focused on taking the right steps to drive more profitable revenue from our strong brands and return the Company to sustainable growth.

A bit better than expected in what world, except one of fantasy. The numbers for the quarter were not only poor, the J.C. Penney Co. Inc. (NYSE: JCP) deal could collapse if a suit by Macy’s Inc. (NYSE: M) over exclusive rights to some Martha Stewart products is won by the successful retailer.

Observers of the company almost all agree that a chief executive officer with media and turnaround skills should be hired as soon as possible. No matter who takes the job, if Stewart will not take a back seat in terms operating control, the company will continue to shrink and losses will rise to the point where the Martha Stewart is not longer a viable standalone enterprise.

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