Martha Stewart Living Omnimedia Inc. reported a smaller-than-expected loss in the second quarter as the media company benefited from a 47 per cent revenue gain, fuelled by the continued return of advertisers to its magazines.

The New York-based company also approved on Wednesday a special one-time dividend of 50 cents a share, payable Sept. 14 to stockholders of record on Aug. 31.

The company posted a loss of $1.17 million US, or two cents per share, in the three months ended June 30, compared with a loss of $33.49 million, or 65 cents per share, in the year-ago period.

Martha Stewart Living recorded revenue of $67.4 million, up from $45.9 million in last year's second quarter. Analysts surveyed by Thomson Financial expected a loss of 16 cents on revenue of $66 million.

"We have a clear roadmap for growth that gives us confidence in the future of our business and in our ability to increase shareholder value," said Susan Lyne, president and chief executive officer, in a statement.

"We have successfully navigated a difficult period and are enjoying significant gains in advertising revenue and new business opportunities."

The company's namesake founder completed her prison sentence in March 2005 for lying to federal investigators about a stock sale. Since then, Martha Stewart Living has stepped up a number of new initiatives, from new magazines to developing branded homes with builder KB Home.

Last month, the company and Eastman Kodak Co. announced a multi-year partnership to develop a line of branded personalized photo products under the domestic diva's signature.

Martha Stewart Living reported revenue increases in all its divisions except merchandising, which saw its sales unchanged from the year-ago period.