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Scripps Networks Beats Q3 Earnings & Revenue Estimates

Scripps Networks Interactive Inc.SNI reported strong third-quarter 2015 financial numbers wherein both the top and the bottom line outpaced the Zacks Consensus Estimate.

GAAP net income in the third quarter was $124.6 million or 96 cents per share compared with 131.3 million or 93 cents in the prior-year quarter. Further, the company's third-quarter adjusted earnings of $1.06 per share beat the Zacks Consensus Estimate of 97 cents.

Scripps Networks Interactive Inc. (SNI) - Earnings Surprise | FindTheCompany

Total revenue in the third quarter of 2015 climbed 20.4% year over year to $776.1 million and also surpassed the Zacks Consensus Estimate of $764 million.

Third-quarter gross profit came in at $505.9 million against $437.3 million in the prior-year quarter. Quarterly gross margin was 65.2% compared with 67.9% in the year-ago quarter. Quarterly operating income fell 13.5% year over year to $271 million. Operating margin, in the reported quarter, was 34.9% compared with 37.1% in the prior-year quarter.

At the end of the first nine months of 2015, the company has $658.5 million of cash from operations compared with $580.2 million in the prior-year period. Likewise, free cash flow in the quarter was $626.4 million compared with $538.4 million a year ago.

At the end of the quarter under review, Scripps Networks had $247.4 million in cash & marketable securities and $4,133.1 million of outstanding debt on its balance sheet compared with $878.2 million and $1,494.4 million, respectively, at the end of 2014. The debt-to-capitalization ratio stood at 0.70 versus 0.47 at the end of 2014.

Segmental Performance

U.S. Networks

Quarterly revenues came in at $660.9 million, reflecting annualized growth of 6.2%. Within this segment, Advertisement revenues climbed 5.2% year over year to $447.8 million. Network Affiliate fee revenues were $199.2 million, up 6.3% year over year. Other revenues increased 49.2% year over year to $13.8 million.

Brand-wise, HGTV revenues totaled approximately $248.3 million, up 6.3% year over year. Food Network revenues came in at $214.2 million, up 1.1% year over year. Travel Channel revenues dropped 0.4% year over year to $73.3 million. DIY Network revenues were $41.1 million, up 11.4% year over year.

Cooking Channel revenues were $33.5 million, up 17.6% year over year. Great American Country revenues were $7.5 million, down 1.9% year over year. Digital revenues deteriorated 37.6% year over year to approximately $36.3 million. Other revenues totaled $8.6 million, up 67.2% year over year.

International Networks

Quarterly total revenue of $118.7 million reflected a substantial increase of 399.5% year over year. Segmental profits grossed $10.9 million, up 283.7% year over year.

Guidance

Scripps Networks projected revenue growth of 13% for 2015.

Zacks Rank & Stocks to Consider

Scripps Networks has a Zacks Rank #3 (Hold). Better-ranked stocks in the same space include AMC Networks Inc. AMCX , Gray Television, Inc. GTN and Sinclair Broadcast Group, Inc. SBGI . All three stocks sport a Zacks Rank #1 (Strong Buy).

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SCRIPPS NETWRKS (SNI): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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