Scripps Income Falls on Expenses; Cable Nets Surge

Oct 17, 2006  •  Post A Comment

E.W. Scripps Co.’s third-quarter net income fell 11 percent to $73 million as costs from the sale of the Shop At Home Network and employee stock-option expenses outweighed higher profit at the company’s cable networks.

Cable networks including HGTV and Food Network posted strong results, and political advertising is helping the company’s television stations, Scripps said Tuesday in a statement.

Profit at Scripps Networks jumped 32 percent to $116 million. Revenue at the unit rose 19 percent to $249 million as ad sales rose 18 percent to $192 million.

Revenue at Scripps Networks is expected to rise 11 to 13 percent in the fourth quarter, the company said, attributing the slower growth rate to a difficult television advertising market.

Rising profit at HGTV, Food Network and Fine Living helped buffer a decline at DIY. HGTV generated $79.3 million in profit, up 19 percent, Food Network profit rose 37 percent to $61.4 million, and Fine Living’s profit rose 23 percent to $4.8 million. DIY’s profit dropped to $100,000 from $2 million in the quarter because of increased programming spending and the cost of adding ratings service from Nielsen Media Research.

Revenue at the Scripps TV stations rose 12 percent to $81 million. Political advertising was a big contributor, rising to $11.7 million from $1 million a year ago.

Costs from discontinued operations included expenses from Shop At Home, which Scripps sold to Jewelry Television. Scripps also has sold five Shop At Home-affiliated broadcast TV stations.

Scripps forecast earnings per share of 67 cents to 71 cents in the fourth quarter, up from 60 cents in the fourth quarter of 2005.

Scripps Networks President John Lansing said the company showed a 10 percent increase in advertising volume during the upfront market and posted price increases that lead the cable industry. The company has seen signs that the scatter market has improved, with price increases in the high-single-digit range above year-ago levels, Mr. Lansing said.

“Scripps had a very solid third quarter thanks primarily to strong advertising sales at our national lifestyle television networks and a flood of political advertising at our local television stations,” said Kenneth Lowe, president and CEO of E.W. Scripps Co. “Ratings and viewership at HGTV and Food Network have good momentum, providing a sound foundation for strong double-digit increases in advertising revenue and segment profit at our Scripps Networks division.”