Scripps beats Q1 estimates, thanks to TV nets
E.W. Scripps posted a solid first quarter yesterday, citing strong results in its network TV biz. The company, which owns O&O television stations, Home & Garden Television, Food Network, DIY Network, Fine Living, Great American Country (GAC) and newspapers, also reaffirmed earnings guidance for Q2.
Scripps' operating revenue for the first quarter 2005 grew 14% year-over-year to 585 million. Operating income for the three-month period reached $114 million, up 16%.
Q1 net income was 70.0 million, or 42 cents per share. In the prior year, first quarter net income was 70.5 million, or 43 cents per share. First quarter 2004 net income included an after-tax gain on investments of $9.5 million, or 6 cents a share.
Strong performance at the Networks division continues to drive the company's financial growth. Scripps Networks' profit was up 30% year over year to $80.9 million in the first quarter 2005. Total revenue for the Scripps Networks division increased 28% to 203 million. The increase in revenue is attributable to strong performance by HGTV and Food Network. Due primarily to increased profitability of the Food Network and the company's allocation of operating income to Tribune Company, which owns 31% of the network, minority interest is expected to be between 15 and 16 million in Q2.
Ad revenue at Scripps Networks was up 30% to 160 million. Revenue from affiliate fees paid by cable system and direct broadcast satellite operators increased 24% to 42.0 million.
At the company's newspapers, segment profit increased 8.3% to 64.0 million.
During the first quarter 2005, total newspaper revenue reached $182 million, up 2.1% over the same period in 2004. Advertising revenue at newspapers managed solely by Scripps for the three-month period was up 3.7% to $144 million.
The company's share of income from joint newspaper operations in Denver, Cincinnati, Albuquerque and Birmingham increased 14% to $17.6 million during the first quarter. The contribution to segment profit from joint newspaper operations was up 37% to $8.0 million.
At the company's broadcast television stations, total revenue was down 4.5% to $72.3 million during the first quarter, primarily because of the lack of political advertising revenue. Political advertising revenue during the same period in 2004 was $4.2 million. Broadcast television segment profit was down 5.5% in the first quarter 2005 to $16.3 million.
At Shop at Home, the company's television retailing business, first quarter revenue rose 38% to $102 million. The company continues to implement its electronic commerce strategy, which includes spending for needed improvements in merchandising, information technology, programming and marketing. The segment loss at Shop at Home in the first quarter was $3.4 million, which is about even with the prior year period.
The results beat Wall Street's expectations. Analysts surveyed by Thomson First Call had forecast a first-quarter profit of 38 cents a share on revenue of $566 million.
"Hearty double-digit revenue growth has been driven by outstanding performance at Scripps Television Networks," said Scripps CEO Ken Lowe, who cited the strength of its lifestyle-driven programming enterprises, which also include Fine Living and DIY -- Do It Yourself.
Second quarter earnings per share are expected to be between 51 cents and 55 cents. Earnings per share during the second quarter of 2004 were 52 cents, including unusual items that increased net income by 4 cents per share.
TVBR observation:
HGTV's bevy of can't-miss home improvement shows are driving much of this. And another good thing-they are re-packaging some of these programs' content as specials to run on their local O&O stations.
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