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Scripps Networks Interactive, owner of the Travel Channel and Food Network, reported second-quarter results in line with Wall Street estimates Tuesday morning, pulling in $892.8 million in total revenues and net income of $1.42 per diluted share.
While familiar concerns about subscription rates and distribution costs permeated the Tuesday morning conference call with investors, analysts picked up on strong engagement numbers with younger viewers, specifically 6 percent digital growth among millennials on social media.
“It’s unclear what exactly this means for the underlying economics, but it’s very interesting,” Needham & Co. analyst Laura Martin told The Hollywood Reporter. “They’re hitting all-time ratings highs on all six networks while hammering away at these social metrics — maybe they have something to do with each other.”
One platform that Scripps has been exploring is Snapchat, the video messaging app that’s been quickly adopted by younger millennials. For the app’s “Discover” page, Scripps has developed shortform content for brands like the Food Network, providing recipes and tutorials and exposing viewers to the channel’s stable of celebrity chefs.
Despite the strong engagement, Scripps’ COO Burton Jablin admitted that “social isn’t being monetized to the extent it can be.” The Knoxville, Ky.-based media company is still focusing on “organic investment,” according to CFO Lori Hickok.
“We want to bring our leverage down and maintain an investment grade rating,” she said on the call, adding that the company does not intend to buy back any stock in 2016.
“Whatever happens in the subscriber universe, we’ll push ahead,” Jablin said.
Scripps shares were up almost 12 percent in the year-over-year at last close to $66.17 from $59.17, although shares had dropped more than 4 percent in intra-day trading Tuesday.
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