Lifestyle content and interactive services operator Scripps Networks Interactive Inc. (SNI) posted higher profit for the third quarter, reflecting strong affiliate fee revenue growth and improved advertising sales at its flagship cable television networks Food Network and HGTV. The company expects Shopzilla segment profit to be above $30 million for the full year.
Q3 Results
The Cincinnati, Ohio-based company's third-quarter net income attributable to SNI was $65.3 million, up 13.9% from $57.3 million in the year-ago quarter. On a per share basis, earnings attributable to SNI common shareholders was $0.39, an increase from the prior-year's earnings of $0.35 per share.
On average, 13 analysts polled by Thomson Reuters expected the company to post earnings of $0.37 per share. Analysts' estimates typically exclude special items.
The company noted that the year-ago net income was reduced by $0.03 per share due to a $4.5 million charge that resulted from a re-measurement of the company's deferred tax liabilities. The re-measurement was related to the company's spinoff from its former parent.
Income from continuing operations attributable to SNI totaled $64.6 million, compared to $58.2 million in the same quarter of last year.
Quarterly operating revenues edged up 0.1% to $364.5 million from $364.2 million reported in the corresponding quarter of the previous year. Eleven Wall Street analysts had a consensus revenue estimate of $365.62 million for the quarter.
Consolidated expenses for the quarter dropped 4.5% to $220.2 million from $230.5 million incurred in the three months ended September 30, 2008.
Segment results
Lifestyle Media
The company's Lifestyle Media segment posted profit of $150.5 million, up 8.3% from $138.9 million reported a year ago, on operating revenues of $325.5 million, up 4.3% from $312.0 million. The revenue growth was driven by HGTV and Food Networks.
Lifestyle Media advertising revenue grew 0.5% to $237 million while affiliate fee revenue was up 16% to $81.1 million on higher rates for HGTV and expanding distribution of all of the company's television networks.
Operating revenue at HGTV was up 6.4% totaling $153 million for the latest quarter. HGTV now reaches 99 million subscribers versus about 97 million at the end of the third quarter of 2008. Food Network operating revenue was $119 million, up 5.1%, and reached 99 million subscribers, up from about 97 million at the end of the third quarter 2008.
Other television networks operated by Scripps Networks Interactive include DIY Network, Great American Country or GAC and Fine Living Network or FLN. In October, the company announced that it is rebranding FLN to the new Cooking Channel. The rebranding is expected to be completed sometime during the third quarter of 2010.
Interactive Services
Operating revenues at the Interactive Services segment, which includes online comparison shopping services Shopzilla and BizRate, fell 25.2% to $38.9 million from $52.1 million last year. Segment profit decreased 44.4% to $6.38 million from $11.5 million reported in the year-earlier period. The company expects Shopzilla segment profit to be above $30 million for the full year.
Year-To-Date Highlights
For the nine-month period, the company reported net income attributable to SNI of $204.9 million, an increase of 15.7%, compared to $177.1 million a year earlier. Per share earnings attributable to SNI common shareholders rose to $1.24 from $1.08 in the prior-year period.
Year-to-date income from continuing operations attributable to SNI increased to $206.9 million or $1.26 per share, from $176.4 million or $1.08 per share in the comparable period of the previous year.
Operating revenues declined 3.0% to $1.11 billion from $1.15 billion reported in the year-earlier period.
Peer Review
Among Scripps' rivals, Discovery Communications Inc. (DISCA) posted lower third-quarter profit of $95 million or $0.22 per share, compared to $134 million or $0.44 per share last year, reflecting higher expenses mainly related to selling and corporate administration. Total revenues for the quarter rose to $854 million from $845 million a year ago.
Another peer, Liberty Media Corp. (LINTA) is slated to report its third-quarter results on November 9, with analysts projecting earnings of $0.11 per share on revenues of $1.83 billion.
Yet another company in the sector, Liberty Global Inc. (LBTYA, LBTYB, LBTYK) narrowed its net loss to $120.3 million or $0.45 per share for the third quarter of fiscal 2009, from the prior-year's loss of $308.9 million, helped by higher revenues and lower non-operating expenses. Revenues increased to $2.824 billion from $2.633 billion in the previous year.
Stock Quotes
Scripps shares, which have been trading between $18.10 and $40.19 in the past 52 weeks, closed Thursday's trading session at $39.23.
For comments and feedback: editorial@rttnews.com