Scripps Networks Shares Drop on Earnings News
Revenues slow and expenses pick up
By Jon Lafayette -- Broadcasting & Cable, 2/7/2013 9:48:02 AM
Earnings and revenue growth were below forecasts by Wall Street analysts, and Scripps Networks stock tumbled more than 4% in Thursday morning trading.
Net income for the fourth quarter was $305.8 million, or 2.02 a share, up from $135 million, or 84 cents a share, a year ago. The results include a $213 million tax benefit. Excluding special items, income from continuing operations was 84 cents a share, compared with 77 cents a share a year ago.
Revenues rose 9.2% to $605 million.
Advertising revenue rose 5.1% to $414 million. Affiliate fee revenue rose 18% to $174 million.
Expenses were up 14% to $339 million.
The company said that for the full year 2013, it expected revenue to rise 7% to 9%, while costs of services would go up 7% to 9%. It also said selling, general and administrative expenses are expected to increase 7% to 9%.
"Our solid fourth-quarter and full-year operating results demonstrate the popularity and superior marketing power of our lifestyle television networks and related interactive businesses," chairman and CEO Ken Lowe said in a statement. "Since the launch of HGTV in 1994, our lifestyle media businesses have generated 18 consecutive years of growth, creating tremendous value for our shareholders, delivering uncommon value to our advertisers and distributors and engaging media consumers at the highest levels. Underpinning the company's success is our commitment to remain focused on lifestyle content categories that touch and inspire the everyday lives of media consumers."
Revenues rose at all of the company's cable networks. Food Network was up 5.2% to $215 million; HGTV, up 5.1% to $200 million; Travel Channel, up 5.9% to $71.1 million; DIY Network, up 13% to $30.4 million; and Cooking Channel, up 38% to $24.7 million. Even Great American Country rose 16% to $7.6 million.
Revenue for the company's digital businesses, including the network-branded websites, was up 9.1% to $33.2 million.
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