Scripps Networks Q4 Earnings Hurt By Rising Programming And Marketing Costs
Scripps Networks CEO Upbeat About Programming And Economy
The cable networks company’s year-end results missed analysts’ targets, although revenues increased at all of its major networks. Operating income fell, but with income tax adjustments folded in Scripps Networks generated a net profit of $344.5M, +93.3% vs the last three months of 2011, on revenues of $604.7M, +9.2%. Analysts expected revenues to come in higher at $613.9M. Excluding one-time items, earnings came in at 84 cents a share, below forecasts for 92 cents. The company’s ad sales increased 4.3% to $409.4M while payments from pay TV distributions were up 14.8% to $166.9M. Scripps notes, though, that its Q4 expenses were up 14% to $339M largely due to “higher employee costs and investments in planned domestic and international growth initiatives” as well as programming and marketing expenses “to drive viewership at all of the company’s lifestyle television networks.” Looking an the key individual services, revenues were up 5.2% to $214.6M at Food Network, 5.1% to $200.2M at HGTV, 5.9% to $71.1M at Travel Channel, 12.9% to $30.4M at DIY Network, 38.4% to $24.7M at Cooking Channel, and 15.8% to $7.6M at GAC. Scripps forecasts that its revenues this year could increase as much as 9% but costs could be up as much as 14%. The channels “have generated 18 consecutive years of growth, creating tremendous value for our shareholders, delivering uncommon value to our advertisers and distributors and engaging media consumers at the highest levels,” CEO Kenneth Lowe says.