Scripps Networks Net Hurt by M&A Costs - Broadcasting & Cable

Scripps Networks Net Hurt by M&A Costs

Ad revenues flat at cable channels
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Scripps Networks Interactive reported lower earnings because of costs connected with its acquisition of TVN.

First quarter net earnings were $124 million, or 94 cents a share, down from $128 million, or 87 cents a share, a year ago. The 2015 earnings included a $10.2 million, or 5 cent per share, charge for TVN transaction expenses and $4.9 million, or 3 cents a share, for restructuring costs.

Adjusted for the TVN purchase and other charges, total segment profit would have been up 0.5%.

Revenues rose 2% to $658 million. Advertising revenues rose slightly to $435 million, while ad affiliate fee revenue was up 4% to $209 million.

“As consumers take increasing advantage of the growing number of ways to enjoy video content, powerful brands that resonate with people across multiple platforms and devices become ever more important,” CEO Ken Lowe said in a statement. “Upscale consumers have built deep and enduring relationships with our brands in the United States and, increasingly, in international markets. By leveraging that relationship, and by broadening our engagement and reach, we are building consistent long-term value for advertisers, distribution platforms, viewers, and shareholders.”

Profits for Scripps’ Lifestyle media businesses were down 4.3% to $295.8 million while revenue rose 1.5% to $634.1 million. Ad revenues were up 0.1% to $428.6 million, reflecting softness in the market, the company said. The networks also had higher marketing and promotion expenses.

By brand, the company said operating revenues were up 4.4% to $237.3 million at HGTV, but down 0.8% to $217.3 million at Food Network. Travel Channel was down 4.8% to $75.9 million. DIY Network was up 9.2% to $38.4 million, Cooking Channel was up 8.2% to $30.6 million and Great American Country rose 3.5% to $7.4 million.

Scripps’ digital businesses reported a 6.9% decline to $24.4 million.

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