Scripps Networks Interactive Reports Second Quarter Financial Results
- Revenue of $601 million, up 13 percent
- Segment profit of $285 million, up 3.9 percent
- Income from continuing operations of $0.93 per share
Scripps Networks Interactive Inc. (NYSE: SNI) today reported operating results for the second quarter 2012.
Consolidated revenues for the quarter increased 13 percent to $601 million from the prior-year period. Results for the three-month period ended June 30 reflect strong advertising revenue of $417 million, up 12 percent, and affiliate fee revenue of $171 million, up 16 percent year-over-year.
Expenses for the quarter increased 22 percent from the prior-year period to $316 million. The increase was driven primarily by increased programming and marketing expenses to drive viewership at all of the company’s lifestyle television networks. Higher employee costs and investments in planned domestic and international growth initiatives also contributed to the increase in expenses.
Total segment profit increased 3.9 percent to $285 million. (See note 2 for a definition of segment profit.)
Second quarter income from continuing operations attributable to Scripps Networks Interactive was $142 million, or $0.93 per diluted share, compared with $133 million, or $0.78 per diluted share, in the second quarter 2011.
During the second quarter 2012, the company repurchased 4.6 million shares of its common stock for $250 million, completing its previous authorization. Under the completed program, the company repurchased 21.4 million shares of common stock for $1 billion at an average price of $46.72. On July 31, 2012, the board of directors authorized another $1 billion share repurchase plan.
“Scripps Networks Interactive has created a clear, competitive advantage on multiple video screens and other platforms by uniquely defining and staying true to the lifestyle content categories that we own,” said Kenneth W. Lowe, chairman, president and chief executive officer. “The company’s strong second quarter financial performance is a direct result of our successful strategy to differentiate our networks by focusing on avid consumer interest in their homes, food and travel.”
“Food Network and HGTV consistently aggregate record numbers of engaged, passionate viewers, and we’re creating considerable momentum at the Travel Channel, where our creative team is working to define the brand and the content genre,” Lowe said. “At Cooking Channel and DIY Network we’re seeing very strong double digit growth both in viewership and in revenues as we appeal on a deeper level to cooking and home improvement enthusiasts who choose to watch our premium-tier channels.”
“Our networks and brand of lifestyle programming attract a highly qualified and upscale audience that our advertising and distribution partners value,” Lowe said. “We set a company record this year for advance advertising sales and reached an important distribution agreement that will make our content easily and widely accessible to millions of consumers on tablets and other mobile platforms.”
“At Scripps Networks Interactive, we’re moving forward on several fronts – digitally, domestically and globally – with the intention of creating long-term value for our shareholders.”
Revenues by network are as follows:
- Food Network was $218 million, up 17 percent.
- HGTV was $205 million, up 8.4 percent.
- Travel Channel was $73.8 million, up 4.9 percent.
- DIY Network was $33.7 million, up 16 percent.
- Cooking Channel was $22.4 million, up 41 percent.
- Great American Country (GAC) was $5.0 million, down 15 percent.
Revenue from the company’s digital businesses, which include its network-branded websites, was $28.3 million, up 3.4 percent.
Updated 2012, Full-year Guidance
Total revenue is now expected to increase between 10 and 12 percent. Contributing to the increase is better than expected advertising revenue during the first half of the year that resulted from strong viewership performance at the company’s lifestyle networks. The inclusion of Travel Channel International results in the second half of the year also is contributing to the increase in expected revenue.