Cable not enough for Scripps in Q1
EmptyNEW YORK -- Shares of media firm E.W. Scripps Co. were under pressure Wednesday after the company reported a lower first-quarter profit and projected weaker-than-expected second-quarter financials despite continued strength at its cable TV networks unit.
The stock, Wednesday's worst performer on The Hollywood Reporter's Showbiz 50 stock index, closed down 3.7% at $43.50.
Scripps cited weaker newspaper advertising, a loss at its Web businesses and a lack of Olympic broadcasts and political advertising at its TV stations as key drivers of the first-quarter weakness.
Scripps posted a profit of $68.5 million, down from the $75.1 million recorded a year ago. Profit from continuing operations fell from $81.5 million to $64.7 million. Revenue grew 2% to $601.4 million.
Revenue at the Scripps Networks unit, which houses HGTV and the Food Network among others, rose 13% year-over-year to $269 million, with unit profit up 20% to $128 million.
Scripps said its TV station group revenue declined 8.7%, and newspaper revenue fell 7.8%.
"At our newspapers, we're contending with the most challenging environment the industry has experienced in recent memory," Scripps president and CEO Kenneth Lowe said. His team's strategy in this market focuses on increasing the firm's share of local and online ad dollars and cutting expenses, he said.
Scripps on Wednesday forecast second-quarter earnings from continuing operations of 58 cents-62 cents per share, down from 64 cents a year ago. It expects TV station revenue to rise in the low single digit percentage range, with newspaper revenue set to fall 4%-6%.
The company projected a second-quarter revenue gain of 8%-10% at Scripps Networks, but reiterated a full-year 2007 growth prediction of 10%-13%. It also sees double-digit profit gains at the unit for the year.
Management also predicted a stronger upfront market after first-quarter ad scatter was in the mid-20% range above last year's upfront levels. Executives said the overall cable upfront should be healthier than last year's flat affair, which Scripps outperformed with 1%-2% increases.