Debt free and sitting pretty, E.W. Scripps Company is still looking for a recovery in its newspaper business. But the television business was so good in Q3 that the company grew revenues and operating income overall.
Revenues were up 8.6% to $183.6 million, while costs edged up only 2.9%, so operating income improved to $668K from a previous year loss of $6.5 million.
“The flow of advertising dollars back into local television continues at an encouraging pace, attracted in part by our commitment to delivering larger and more engaged audiences through a determined focus on high-quality local news content,” said Scripps CEO Rich Boehne. “Many of our key television advertising categories have bounced back to pre-2009 levels.”
But there’s still work to do on the newspaper side. “The reorganization of our newspapers operations has yielded benefits across the board and moves us closer to a long-term sustainable model. Advertising revenue declines, while moderating, remain stubborn and particularly challenging due to our exposure to the Florida and California economies. We’ve taken advantage of this period to reposition our operations there so we can benefit when those long-term growth areas stabilize and recover,” Boehne noted.
TV revenues increased 31% to $78.5 million. A good bit of that was political, of course, with political advertising of $14.8 million compared to only $1.7 million a year earlier. But core business was up as well, even with management noting that the deluge of political ads had used up a lot of inventory and squeezed out other advertisers.
Automotive was particularly strong, up 70% from a year ago. That helped fuel a 25% increase in national advertising to $20.1 million and a 4.7% increase in local advertising to $37.6 million.
“Pacing is still strong,” Boehne told analysts, although he noted that the recovery began last December, so comps will be tougher. Even so, he’s expecting growth in December and Q4 overall is projected to be up 35-40% for TV.
On the newspaper side, Q4 is expected to bring “a slight moderation in the decline of ad revenues.” Newspaper revenues were down 3.8% to $100 million in Q3, with ad revenues down 6.8% to $68.3 million. National was down 11%, local 10% and classified 10%.