Scripps Networks Quarterly Earnings Exceed Expectations
The company behind HGTV, Travel Channel and the Food Network grows earnings as revenue rises 2.3 percent.
Scripps Networks Interactive, the company behind HGTV, Travel Channel and the Food Network, on Thursday reported improved fourth-quarter earnings that exceeded Wall Street expectations.
Quarterly earnings of $132 million compared with $109 million in the year-ago period, up 22 percent. The year-ago profit was based on lower revenue and was dragged down by a goodwill writedown.
Revenue at the company increased 2.3 percent to $669 million as advertising revenue climbed only 0.7 percent, but affiliate fee revenue rose 6.1 percent. The revenue figure came in below analysts' average forecast. Costs of services and selling, general and administrative expenses for the quarter rose 6.9 percent amid restructuring expenses of $14.4 million and higher programming amortization.
During the fourth quarter, Scripps provided voluntary early retirement packages to some employees and notified others of the elimination of certain positions, while also announcing the closure of its Cincinnati office later in 2015. For those moves, the company took the $14.4 million charge for severance, retention and related retirement benefit costs.
Full-year 2014 revenue was up 5.3 percent to $2.7 billion as advertising revenue rose 5.7 percent due to higher pricing, and affiliate fee revenue was up 5.4 percent due to contractual rate increases.
The company's networks uses such lifestyle personalities as chefs Rachael Ray and Bobby Flay.
Said Scripps chairman, president and CEO Kenneth Lowe: "The strength of our lifestyle media brands and the connections they make with consumers and advertisers enabled the company to maintain its record of growth and creating shareholder value for the quarter and the full year. The company is in a great position to capitalize on the many opportunities in an ever-changing media environment."