E.W. Scripps Q2 Earnings Drop 47.5%

Poor performance by newspapers, expenses from Scripps Networks Interactive sink financial results.

By Robert Marich -- Broadcasting & Cable, 7/24/2008 10:39:00 AM

Broadcasting and newspaper conglomerate E.W. Scripps reported a 47.5% decline in second-quarter profit Thursday, tagged by poor operating performance of its newspapers and expenses related to the July 1 spinoff of its basic-cable-network properties.

Earnings fell to $51.2 million, or 94 cents per share, from $97.5 million ($1.78) in the year-ago period.

Revenue at the Cincinnati-based media company edged up 3.8% to $664.1 million for the three months ended June 30 from $640.1 million a year ago.

Operating profit in its TV-station group declined 22.1% to $18.3 million from $23.5 million. TV-station-group revenue slipped 4.8% to $80.5 million from $84.5 million. The company’s other big business segment of newspapers performed ever worse.

In TV-station advertising, local fell 7% and national dropped 7.6%, although political was up.

E.W. Scripps stated that the TV group experienced “generally weak local and national advertising sales, particularly in the automotive and retail categories. Political-advertising revenue during the quarter was $1.6 million compared with $400,000 during the same period in 2007. Political-advertising revenue was weaker than expected due to the lack of primary-campaign spending in Florida and Michigan. Year-to-date, political-advertising revenue at the company's TV stations is about $4.7 million vs. $700,000 in the prior-year period.”

Looking ahead, the company’s guidance suggested a 15%-17% hike in third-quarter TV-station revenue, lifted by political advertising, which will be $40 million-$44 million for the full year.

Earlier this month, the company mounted a cashless stock spinoff its cable-TV networks, including Food Network and other media assets, into Scripps Networks Interactive, which is now a separate publicly traded entity.

Because that decoupling took place after the second quarter ended, Scripps Networks Interactive businesses are included in E.W. Scripps earnings announced Thursday, but they will be separate in the future.