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Scripps Networks Cooks Up Higher Profits in Q2 - Broadcasting & Cable

Scripps Networks Cooks Up Higher Profits in Q2

Ad revenues rise 1.2%
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Scripps Networks Interactive, which restructured last year, reported a big jump in earnings despite a small gain in advertising revenues.

Net income rose 26% to $193.7 million, or $1.49 a share, from $153.8 million, or $1.07 per share, a year ago.

Revenues rose 3.4% to $732.1 million. Ad revenue rose 1.2% to $502.9 million and affiliate fee revenue was up 8.7% to $215.2 million.

“These results validate the continued strength of our brands, fortified by the close relationships we’ve forged with millions of engaged, upscale consumers, and the advertisers and distributors that want to reach them,” CEO Ken Lowe said in a statement. “We’re confident we can extend that influence as we continue to grow internationally, reach new audiences who seek out our valued content on a variety of delivery platforms, and build long-term shareholder value.”

The company updated its guidance for 2015, saying that it expects revenue to increase by about 12% and cost of services to increase about 24%.

Scripps lifestyle media segment—which includes HGTV, Food Network, Travel Channel and other cable networks and Web sites—had a profit of $392.2 million, up 9.4%. Revenues were up 3.2% to $710 million.

Ad revenue for the Lifestyle media segment was up 1.4% to $496.9 million. The company attributed slight growth to softness in the advertising market and audience delivery at some networks.

Scripps Networks said the restructuring and layoffs it instituted last year contributed to lowering its cost of services and selling, general and administrative expenses for the quarter by $15.3 million, or 3.9% to $373.6 million from the previous year.

Operating revenue for HGTV was up 7.4% to $271.8 million in the quarter, but down 2.5% to $228.1 million at Food Network. Travel Channel’s operating revenues dropped 4.4% to $81.7 million, but were up 10.2% to $48 million at DIY. Cooking Channel operating revenues climbed 8.6% to $35.1 million and Great American Country increased 3.4% to $8.1 million.

Scripps' digital businesses rose 1.5% to $34.3 million.

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