Scripps Networks Third-Quarter Earnings Exceed Estimates
Ratings grew at five of the company's six U.S. networks "despite coverage of the Olympics and the U.S. election."
Scripps Networks Interactive, the company behind such lifestyle channels as HGTV and Food Network, on Monday reported third-quarter earnings that exceeded Wall Street expectations.
The company posted earnings of $146.0 million, or $1.12 per share, compared with $124.6 million, or 96 cents per share, in the year-ago period. Adjusted for certain items, the latest quarterly figure even rose to $1.26 per share. Analysts had on average forecast 93 cents per share.
Quarterly revenue increased 3.5 percent to $803.1 million as advertising revenue rose 5.4 percent and distribution revenue declined 1.4 percent. "The U.S. Networks segment continued to benefit from a strong advertising market," the company said.
But operating income declined 4.8 percent "primarily due to the expected timing of programming premieres leading to the growth in programming expenses for the U.S. networks." Programming expense growth is expected to slow in the fourth quarter due to the shift in show premieres.
Stifel, Nicolaus analyst Benjamin Mogil said in a first reaction that the "results were ahead of expectations on stronger-than-expected advertising and strong cost controls."
Ratings grew across five of the company's six U.S. networks "despite coverage of the Olympics and the U.S. election." And HGTV saw its highest-rated third quarter ever in all key demographics, while Travel Channel had its fourth consecutive quarter of year-over-year ratings growth.
In addition, Scripps said that "Cooking Channel and DIY Network each delivered their best-rated quarters ever, while Great American Country saw its highest-rated third quarter since 2007."
International networks revenue for the third quarter rose 3.8 percent to $123.2 million, but the international operations widened their operating loss to $14.9 million from $6.0 million in the prior-year period.
"Scripps Networks Interactive delivered solid revenue growth at both our U.S. and international business segments, helping drive a double-digit improvement in net income,” said president, chairman and CEO Kenneth Lowe. “Our successful strategy to focus on our differentiated lifestyle brands in the home, food and travel genres continues to pay off. Our popular networks are available on more platforms and reaching more new audiences than before, positioning the company for continued growth.”