Scripps considers leaving newspapers
EmptyNEW YORK -- Shares of E.W. Scripps Co. rose Wednesday as investors responded to comments that the company was considering the possibility of leaving the newspaper business. Scripps also owns several cable channels including HGTV and the Food Network.
Shares of the Cincinnati-based company rose $1.92, or 3.8%, to close at $51.92 on the New York Stock Exchange after trading at more than double its average volume. Earlier in the session, the stock traded as high as $52.15, eclipsing a previous 52-week high of $51.09.
Scripps told investors at a conference late Tuesday sponsored by Citigroup that it is considering exiting the newspaper business. It publishes about 20 papers, including the Rocky Mountain News.
"Management's major concern is that the newspaper business could decline in value over time hurting the overall value" of its shares, Merrill Lynch analyst Lauren Rich Fine said in a note to investors.
"We would also note that some investors are hesitant to own the stock due to the newspaper business, regardless of the faster overall growth rate." She has a "Neutral" rating on shares.
Goldman Sachs analyst Peter Appert has a "Buy" rating on the stock, saying investors would respond well to the impression that Scripps is moving away from slow-growth businesses like television and newspapers in favor of faster-growing areas like cable and the Internet.
New media businesses like cable and Internet should contribute about 64% of Scripps' earnings in 2006, while they comprised just 17% of earnings five years ago, Appert said.