Cable Networks Lift Scripps’ Q1 Earnings

Strong Scatter-Ad Market for Food Network, Home & Garden Television Help to Offset TV-Station-Group Weakness
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Media conglomerate E.W. Scripps posted improved first-quarter earnings, bucking an industry trend of poor results, lifted by a strong scatter-ad market for cable channels Food Network and Home & Garden Television.

The Cincinnati-based company reported that its first-quarter earnings grew 23% to $84.1 million, or 51 cents per share, from $68.5 million (42 cents) in the same quarter one year ago. Corporate revenue increased 6.8% to $642 million from $601.4 million.

But results from its newspaper and local TV stations declined, hurt by presidential-primary boycotts in Florida and Michigan that “left a lot of money on the table,” Scripps president and CEO Kenneth W. Lowe said in an investors’ conference call. He added that automotive and retail were also weak.

First-quarter segment profit at its stations slid 13% to $14.2 million versus $16.4 million, despite an increase in political ads. Overall TV-station revenue was down 0.6% to $76 million. In that TV-revenue segment, local-TV-station revenue fell 5.8% to $45.7 million and national ads were off 7.5% to $22.1 million. This was not completely offset by a gain in political to $3.1 million from $300,000.

In looking forward, the company offered guidance in the TV-stations segment that “total revenue is expected to be flat to up slightly compared with the prior-year period. TV-station-group expenses are expected to be up in the mid-single-digits.”

The company said the scatter markets for Food and HGTV were up 40% and 25%, respectively, in comparison to the upfront market rate for their cable-TV ads. In the conference call, brass said they’d consider buying a stake in Food held by Tribune at the right price, which would consolidate their hold. Scripps currently owns 69% of Food and Tribune the balance.

Scripps said its plan to split into two companies clustering national media and local media remains on schedule.

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