Scripps Net Income Hurt by Acquisition Charges - Broadcasting & Cable

Scripps Net Income Hurt by Acquisition Charges

Revenues up 20%, including domestic ad growth of 5%
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Scripps Networks Interactive’s acquisition of TVN in Poland boosted revenue in the third quarter but resulted in charges that cut into profits and offset a good quarter at its domestic networks.

Net income was $124.6 million, or 96 cents a share, in the quarter, down from $131.3 million, or 93 cents a share, a year ago.

Net income was affected by the impact of the strong dollar on funds generated by TVN, transaction and integration expenses and restructuring charges. The company said excluding those charges, net income would have been up 5% to $137.6 million, or $1.06 per share.

Revenues rose 20% to $776 million. Ad revenue was up 22% to $527.9 million. Affiliate fee revenue was up 13.5% to $224.9 million.

The results were above Wall Street estimates.

"This has been a transformative quarter for Scripps Networks Interactive. Our international business has been bolstered by the successful acquisition of Poland's leading multi-platform media company, TVN. Our networks continue to thrive in the United States, and their success is reflected in strong growth in both advertising and affiliate revenues,” said CEO Ken Lowe.

“With a strategy that enables us to create deeper connections with consumers across the world, we are focused on delivering long-term growth and enhanced shareholder value," Lowe said.

Profits at Scripps Networks’ U.S. Networks rose 12.2% to $330.3 million. Revenues rose 6.2% to $660.9 million. Advertising revenue was up 5.2% to $447.8 million. Affiliate fee revenue was $199.2 million, up 6.3%.

During the quarter, Scripps Networks completed the acquisition of TVN in Poland, which increased the company’s international revenue by 400% and drove the first quarter of profits for its international operations.

International Network profits were $10.9 million, compared to a $5.9 million loss a year ago. Revenues were $118.7 million, compared with $23.8 million. The company said it expects full year revenue to increase 13%. Last quarter, the company expected total revenue to rise about 12%.

In the U.S., operating income for HGTV rose 6.3% to $248.3 million. Food Network was up 1.1% to $214.2 million. Travel Channel dipped 0.4% to $73.3 million. DIY jumped 11.4% to $41.1 million and Cooking Channel, increased 17.6% to $33.5 million. Great American Country was down 1.9% to $7.5 million.

Scripps Networks' domestic digital businesses grew 37.6% to $36.3 million.

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