Scripps Networks Interactive Inc.
) reported better-than-expected financial results for the second
quarter of 2014. Quarterly GAAP net income stood at $153.8 million
or $1.07 per share compared with $159.7 million or $1.07 per share
in the prior-year quarter. However, adjusted earnings per share of
$1.14 missed the Zacks Consensus Estimate by a penny. Meanwhile,
quarterly total revenue of $708.1 million increased 6.5% on an
annualized basis and was also above the Zacks Consensus Estimate of
Scripps Networks Interactive, Inc - Earnings
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The second-quarter gross profit came in at $517.9 million
against $496.4 million in the prior-year quarter. Quarterly gross
margin stood at 73.1% compared with 74.6% in the year-ago
quarter. Quarterly operating income fell 2.1% year over year to
$283.5 million. Operating margin, in the reported quarter, was
40% against 43.5% in the prior-year quarter. Also, Scripps
Networks repurchased 4 million shares for a consideration of $300
During the second quarter of 2014, Scripps Networks generated
$99.6 million of cash from operations compared with $160 million in
the year-earlier quarter. Free cash flow, in the reported quarter,
was $80.9 million against $141.4 million in the prior-year
At the end of the quarter under review, Scripps Networks had
$202 million in cash & marketable securities and $499.7 million
of outstanding debt on its balance sheet compared with $686.4
million and $1,384.5 million, respectively, at the end of 2013. The
debt-to-capitalization ratio stood at 0.19 versus 0.36 at the end
Lifestyle Media Segment
Quarterly revenues came in at $684.5 million, reflecting an
annualized growth of 6.1%. Within this segment, Advertisement
revenues climbed 6.5% year over year to $485.8 million. Network
Affiliate fee revenues were $187.5 million, up 4.1% year over year.
Other revenues increased 25.2% year over year to $11.3 million.
Total segment profit was $319.3 million, nearly flat year over
Brand wise, HGTV revenues were approximately $246.6 million, up
6.8% year over year. Food Network revenues came in at $238 million,
reflecting a 6.4% hike year over year. Travel Channel revenues
totaled $85.2 million, up 1.6% year over year. DIY Network revenues
were $43.2 million, up 12% year over year. Cooking Channel revenues
were $32.2 million, up 13.1% year over year. Great American Country
revenues stood at $7.8 million, up 11.9% year over year. SN Digital
revenues fell 5.3% year on year to around $27.1 million. Other
revenues totaled $4.5 million, up 7.5% year over year.
Quarterly total revenue of $25 million was up 26.1% year over
year. On the other hand, operating loss in the segment came in at
$43.2 million, wider 63.8% year over year.
Other Stocks to Consider
Scripps Networks currently has a Zacks Rank #3 (Hold).
Better-ranked stocks in the media industry which warrant a look
include CTC Media, Inc. (
), Cumulus Media Inc. (
) and Gray Television Inc. (
). All three stocks have a Zacks Rank #2 (Buy).
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