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RSSAssociated Press
By TERRY KINNEY Associated Press Writer
CINCINNATI--Media company E.W. Scripps Co. reported Monday that second-quarter earnings fell 27 percent, mostly because of costs associated with the sale of its Shop at Home television and online retailing subsidiary.
But earnings from continuing operations exceeded analysts' expectations, and investors responded by pushing up share prices more than 2 percent in afternoon trading.
Earnings fell to $71.1 million (56.28 million), or 43 cents a share, for the quarter ended June 30 compared with $97.6 million, or 59 cents a share, last year. This year's second-quarter figures included $2.7 million (2.14 million), or 2 cents a share, for employee stock option expenses, which the company began reporting Jan. 1.
Scripps announced last month that its Nashville, Tennessee-based Shop At Home, the nation's fourth-largest TV shopping outlet with 650 employees, would end broadcasting in late June because of lagging performance, and agreed to sell certain Shop At Home assets to Jewelry Television for $17 million (13.46 million). Scripps took a charge of $33.7 million (26.68 million) in the quarter related to the sale.
Earnings from continuing operations _ which excludes results from businesses that have been, or are in the process of being sold _ rose to $104.8 million (82.96 million), or 64 cents a share, compared with $103 million, or 62 cents a share, a year earlier.
That topped estimates by analysts surveyed by Thomson Financial, who were looking for second-quarter earnings of 60 cents per share.
"Earnings came in better than expected, and a large portion of that was on interactive media, so that created a positive variance," said Michael Kupinski, an analyst with A.G. Edwards & Sons.
Revenue climbed 19 percent to $641.9 million (508.11 million) from $540.5 million in the year-ago period on solid performances from Scripps Networks, as well as its newspapers and interactive media unit. Wall Street was expecting higher sales of $657.2 million (520.22 million).
Scripps Networks, which includes HGTV and the Food Network, saw its total revenue climb 17 percent to $286 million (226.39 million). Newspaper revenues edged up 0.6 percent to $182 million (144.07 million), while revenue for the interactive media division, which includes Shopzilla and uSwitch, leaped to $65 million (51.45 million).
On a pro forma basis, as if Scripps had owned Shopzilla and uSwitch for the year-ago quarter, combined revenue of those operations nearly doubled.
"Since being acquired by Scripps, financial performance at Shopzilla and uSwitch has been outstanding, which we believe bodes well for the company's shareholders," said Kenneth Lowe, the company's president and CEO.
Scripps forecast third-quarter earnings per share from continuing operations of between 38 cents and 42 cents, including a charge of 7 cents per share for the acquisitions of Shopzilla and uSwitch. Last year's third-quarter results were 39 cents per share. Analysts have pegged the company to earn 41 cents per share in the quarter.
"It's obvious the company is exceeding its peer group in terms of revenue growth," Kupinski said.
But Kupinski said he thinks earnings growth will slow in upcoming quarters when the company's results will be compared with stronger quarters.
Shares rose 95 cents, or 2.3 percent, to close at $42.87 in trading Monday on the New York Stock Exchange, but remain nearer the lower end of their 52-week range of $41.34 to $51.19.
For the year, Scripps has made $146.2 million (115.73 million), or 89 cents a share, on revenue of $1.23 billion, compared with earnings of $167.6 million (132.67 million), or $1.01 a share, on revenue of $1.02 billion a year ago.
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E.W. Scripps Co.: http://www.scripps.com
