Accounting Change Drops Scripps Networks Interactive Earnings - Broadcasting & Cable

Accounting Change Drops Scripps Networks Interactive Earnings

U.S. ad revenue up 9% in fourth quarter
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Scripps Networks Interactive reported lower fourth-quarter profits despite a healthy gain in domestic ad revenue.

Net income fell to $52.1 million, or 40 cents per share, from $164.7 million, or $1.27 cents a share. The company said the decline was driven by a non-cash accounting adjustment related to the write-down of goodwill and related intangible foreign investments, tax effects and non-cash write-down of an equity-method investment. Also contributing to the decline was foreign currency transaction exchange losses primarily due to the strengthening of the dollar

Revenues rose 4.3% to $888.7 million, exceeding Wall Street forecasts. Adjusted earnings per share were $1.02, lower than expectations.

At Scripps Networks' U.S. networks, operating income rose 6.1% to $301.4 million from $284.1 million. Revenues were up 4.1% to $730.6 million. Advertising revenues were up 9.4% to $523.3 million.

Distribution revenues were down 3.1% to $193 million. The company said the decline came because of lower rates paid after Charter Communications and AT&T acquired larger distributors. The company also said it decided not to extend SVOD deals. The number of subscribers to its networks was also down, although the decline at traditional distributors was partially offset by revenues from new over-the-top and non-linear platforms.

Its international networks registered a $42.6 million loss, compared to a $19.4 million profit a year ago.

“2016 was an extraordinary year for Scripps Networks Interactive. We achieved record levels of revenue and significantly improved our earnings. We increased ratings and engagement with audiences across our linear and digital platforms and expanded our international reach to new markets,” said CEO Ken Lowe (pictured).

Scripps Networks Interactive reported record operating revenues and advertising revenues for the year.

“This standout performance is a direct result of our relentless focus on operational execution and the deliberate investment we’ve made in programming, international businesses and in Scripps Lifestyle Studios,” Lowe said. “Looking ahead to 2017 and beyond, we continue to be focused on sustainable long-term growth, driven by the strength of our inspiring brands and content, and growing our reach across different platforms and geographies. We have the right strategic priorities and team to continue delivering increased shareholder value.”

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