News Column

Scripps Networks shares rise despite 4Q profit drop

February 14, 2014

By Roger Harris, The Knoxville News-Sentinel, Tenn.



Feb. 14--Scripps Networks Interactive reported a sharp drop in fourth quarter earnings Friday, but investors didn't care.

Shares of the Knoxville-based lifestyle media company gained $1.51 to close at $78.95, its highest closing price in more than a month.

Scripps reported net income of $109 million, or 73 cents per share, down 64 percent from the same period the prior year.

The decline in earnings reflected various one-time expenses, including a $24.7 million, or 17 cents per share, goodwill write down related to the company's Travel Channel International business.

Operating revenues for the fourth quarter rose 8 .2 percent to $654 million.

Analysts were expecting earnings of 97 cents per share and revenues of $655.4 million, according to Thomson Reuters. Analysts typically exclude one-time expenses.

Scripps executives had a positive take on the recently ended quarter and were optimistic about revenue growth for current year in a conference call with analysts.

"We're coming off another great quarter driven by our ability to attract an engaged, upscale audience with our unique lifestyle content," Scripps Chairman, President and CEO Ken Lowe said.

Advertising revenue and viewership were both up in the fourth quarter, a trend that should continue in 2014, Lowe said.

Increases in affiliate revenue and "growing contributions from our international business" should also boost the current year's results, Lowe said.

He noted that the company's Travel Channel audience in the United Kingdom increased 57 percent last year and said Scripps is making "steady progress" in expanding its presence in Russia, Poland, the Phillippines and other international markets.

Shareholder value will also be increased this year through an enhanced share buyback program and increased dividend, Lowe said. Scripps announced Thursday that its board had authorized spending an additional $1 billion to buy back shares.

For the current year, the company expects 6-8 percent revenue growth, said Lori Hickok, executive vice president of finance.

"So far in the first quarter the advertising market has strengthened a bit and our advertising partners tone is positive about 2014," Hickok said.

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(c)2014 Knoxville News-Sentinel (Knoxville, Tenn.)

Visit the Knoxville News-Sentinel (Knoxville, Tenn.) at www.knoxnews.com

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Source: Knoxville News-Sentinel (TN)


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