Scripps Networks Second-Quarter Earnings Drop, Revenue Rises
Scripps Networks Interactive, the company behind HGTV, Travel Channel and the Food Network, on Thursday reported slightly lower second-quarter earnings as higher expenses more than offset higher revenue.
Second-quarter earnings of $153.8 million were down from $159.7 million in the year-ago period. Operating profit declined 2.1 percent to $283.5 million.
Revenue increased 6.5 percent to $708 million as advertising revenue rose 7.6 percent and affiliate fee revenue grew 4.5 percent.
Costs of services and selling, general and administrative expenses for the quarter jumped 13 percent amid higher programming amortization and marketing and promotion expenses at the company’s lifestyle TV networks.
Also contributing to the higher expenses was the firm's international expansion, including $9.7 million of costs for the early termination of certain third-party back-office and sales-related services.
The company's networks uses such lifestyle personalities as chefs Rachael Ray and Bobby Flay.
"The company delivered another solid quarter validating the strength of our lifestyle brands and the quality of viewers they attract both domestically and internationally,” said Scripps chairman, president and CEO Kenneth Lowe. "Our popular lifestyle networks delivered on our expectations for the quarter. Our confidence in the company enabled us to continue investing in our brands by developing compelling content, while returning cash to shareholders through our share repurchase program."
Stifel, Nicolaus analyst Benjamin Mogil said the results were in line with his expectations, but advertising was "a little weaker than expected," similar to what other companies have reported this earnings season.