Scripps
Networks Interactive cooked up a big increase in third-quarter profits, with a
strong ad market boosting its cable channels.
Net
income rose 56% to $102 million, or 61 cents per share, compared with $65.3
million, or 39 cents per share, a year ago.
Revenues
increased 40% to $509 million. Excluding Travel Channel, acquired last
year, revenue increased 22% to $445 million.
"Scripps
Networks Interactive had an outstanding third quarter, benefitting from robust
affiliate revenue growth and continued strong advertising demand, particularly
for our targeted lifestyle television networks," said Kenneth W. Lowe,
chairman, president and chief executive officer, in a statement. "All of
our networks and our online shopping related businesses contributed to
double-digit revenue and earnings growth."
Scripps
said profits at its Lifestyle Media segment rose 55% to $232 million, including
the results from the Travel Channel. Advertising revenue was up 34% to $316 million.
Excluding Travel Channel, ad revenue was up 18%. The company said that the ad
market continues to be strong, with scatter prices running 20% above upfront.
At the same time, there were few cancellations of upfront ad buys heading into
the first quarter.
Adding
the Travel Channel also boosted programming expenses, which were $98.7 million,
up 24%. Without Travel Channel, programming expenses rose 5.7%.
HGTV's
revenue was up 14% to $174 million.
Food
Network's revenue was up 35% to $160 million.
DIY
Network's revenue was up 29% to $22.8 million.
Revenue
at Travel Channel increased 14% to $62.3 million, on a pro-forma basis. "The
acquisition of Travel Cannel was a win for the company. Every indicator is
moving in the right direction," said CFO Joe Nicastro. The network is on track
to be accretive in terms of segment profits and overall earnings per share, he
said. Under the Scripps ad sales staff (a deal under which Discovery Communications
sold Travel Channel ads ended, saving Scripps $20 million a year), the network
has a broader list of advertisers and has reduced the amount of airtime devoted
to direct response ads from 30% to a level in the high teens. The network
gets about 10% more for spot advertising than it does from direct response.
Travel Channel was also able to increase its ad rates during the upfront.
Revenue
at Cooking Channel was $12.2 million, up 9.3%. Scripps paid $40 million
in launch fees to cable operators to rebrand from the old Fine Living Network,
but the conversion appears to be paying off. Scripps said total day
audiences for the new Cooking Channel are up 43% and primetime ratings are up
15%. Ad rates on CPM (cost-per-thousand viewers) basis for Cooking Channel are
about 85% of those on Food Network. They were 65% of those rates when the
channel was Fine Living
Revenue
at Great American Country rose 18% to $7.6 million.
Revenue
from digital businesses rose 23% to $21.5 million.
