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Q4 Losses Prompt Scripps to Explore Strategies for Shop at Home

Feb 2, 2006  •  Post A Comment

E.W. Scripps said Thursday it is exploring strategic alternatives for Shop at Home after the media company took an earnings hit in the fourth quarter related to losses at the shopping channel and company officials acknowledged that Shop at Home will take longer than expected to achieve profitability.

Shop at Home, of which Scripps took full control of in late 2003, has been a sore spot for the company ever since, with the unit never achieving profitability due to product sales that have yet to meet expectations and to slower-than-expected cable distribution growth.

The struggles at the channel prompted company officials to launch an analysis late last year to determine its outlook. That led to the company to book a $90.6 million write-down for Shop at Home in the fourth quarter and to explore strategic alternatives.

That write-down, plus $10.4 million in losses at the channel, contributed to Scripps reporting a $603,000 loss for the fourth quarter as woes at Shop at Home more than offset strong results at the company’s cable powerhouse, Scripps Networks. Revenue for the quarter jumped 17 percent to $707 million for the quarter.

Scripps Networks continued to be the main driver of growth for the company, with segment profit up 34 percent to $122 million, while total revenue was up 21 percent to $247 million, fueled in part by strong gains in advertising revenue.

The company’s television stations group reported a 10 percent decline in revenue to $89.4 million, driven primarily by a decline in political advertising revenue to $2.5 million from $21 million a year ago. Broadcast segment profit fell 25 percent to $29.9 million.