Scripps cuts Q1 outlook, shares fall
EmptyNEW YORK -- Publisher and television broadcaster E.W. Scripps Co. cut its first-quarter forecast Wednesday due to weaker-than-expected newspaper advertising sales, driving its shares down as much as 5%.
Scripps also attributed its lowered forecast on costs related to management changes at its Internet comparison shopping site Shopzilla and softness in its Internet search businesses.
The stock ended down 3% at $45.35 after hitting a low of $44.35 on the New York Stock Exchange.
Despite its lowered outlook, Scripps presents a buying opportunity, Credit Suisse analyst Debra Schwartz said in a note to investors.
Scripps lowered its forecast for income from continuing operations to 33 cents to 37 cents a share from its earlier estimate of 39 to 43 cents a share.
Analysts on average had forecast 43 cents a share, according to Reuters Estimates.
Scripps forecast first-quarter revenue at its newspapers to fall 6% to 8% from a year earlier compared to its earlier estimate of a decline of 5% to 7%.
Scripps owns newspapers such as the Rocky Mountain News in Denver, Colorado, and the Corpus Christi Caller-Times in Texas. It has managed to stay in Wall Street's favor with television assets including Home & Garden Television and the Food Network.
The company generated investor excitement earlier this year when its chief financial officer said Scripps has spent time "looking at different scenarios for the company."
He also said that, in theory, "the most advantageous route would be in some form or fashion to separate the newspaper business from the rest of the business."
The company has not made any further comment on its plans for its newspapers. A spokesman was not immediately available for comment.
Scripps forecast its Interactive Media division, which includes Shopzilla, to break even in the first quarter compared with its previous estimate of a $9 million profit.
The company said it made no changes to forecasts for Scripps Television Station Group and Scripps Networks, home to the Food Network and home improvement network HGTV.
Scripps had reported stronger-than-expected fourth-quarter earnings in January, but its first-quarter profit forecast was below market expectations and investors were concerned about slowing sales at its cable networks and dwindling visitors to Shopzilla.
Earlier in February, Shopzilla named its chief operating officer, William Glass, to the role of president, succeeding John Phelps. Phelps, 39, and Shopzilla co-founder Farhad Mohit, 37, will leave their operating roles following the transition.
"The recent hiccup, if that is all it is, is of more concern than usual, given the change in management and Scripps' apparent difficulty in projecting results," Merrill Lynch analyst Lauren Rich Fine wrote in a note to investors.