Martha Stewart built an empire on recipes and decorating tips

Martha Stewart Living Omnimedia saw revenue fall 8.6% in the October to December period compared with a year ago, although it also saw profits rise.

Martha Stewart has been accused of lying to investigators over the sale of shares in drugmaker ImClone.

The company, which has not been accused of any crimes, produces magazines, TV programmes and merchandise.

'Negative impact'

Revenues at Martha Stewart Living Omnimedia fell to $70.9m during the October to December period, compared with $77.6m in the same period last year.

Despite the drop in revenue, the firm reported a net profit of $4.6m, compared with a $2m loss a year ago.

The company said it had seen better-than-expected circulation figures and "continuing success" of its Martha Stewart Signature furniture range.

"We are pleased that fourth quarter results are better than expected," said chief executive Sharon Patrick.

"Nevertheless, we continue to feel the negative impact of the events surrounding Martha Stewart's personal legal situation."

Advertising pages at the firm's key Martha Stewart Living magazine were down by 35% last year, and the company said it expected falling advertising to lead to a first-quarter loss.

Deliberations

A New York jury is currently considering verdicts in the case against Ms Stewart.

She faces one count of conspiracy, two counts of making false statements and one count of obstruction of agency proceedings.

Each count carries a possible five-year jail term and a $250,000 fine.

It is alleged she ordered her broker to sell her stock holdings in biotech firm ImClone after she received an improper tip that federal regulators would not approve the firm's anti-cancer drug, Erbitux.

However, the most serious charges of securities fraud, carrying a maximum 10-year jail term, were dismissed last week when the judge said the prosecution case was "weak".

Some analysts have said the future of Martha Stewart Living Omnimedia could depend on the outcome of the trial.

The firm said that as the trial approaches its conclusion "we have prepared for the various possible outcomes and are focused on strategies to grow the value of the business and improve the future financial performance".