E.W. Scripps Co. reported higher earnings and said that the reorganization announced in January will result in $40 million in annual savings.
Net income was $73 million or 84 cents a share, up from $40.2 million or 43 cents a share a year ago. This year’s income includes a $5.5 million gain from redeeming senior notes.
Revenues were $681 million, up 9.4%.
The results were below Wall Street expectations, hurt by lower revenues and income at Scripps national networks unit.
“Since the beginning of this year, Scripps has been engaged in examining the best ways to structure our company so that we are well-positioned to capture the opportunities we see emerging in our industry,” Scripps CEO Adam Symson said. “We see those in three key growth areas: the content categories of news, sports and entertainment; TV distribution platforms; and the burgeoning marketplace enabled by ATSC 3.0.”
Also: Scripps Sees Opportunity in 'Broken' RSN Business
Symson said the reorganization will generate savings by centralizing some services and consolidating layers of management.
“We expect to realize savings of at least $40 million. Our end goal, however, is not just a more efficient structure but a smarter one, designed to use the breadth of our assets to accelerate the company’s growth,” he said.
Scripps’s local-media division had a segment profit of $152 million, up from $82.2 million a year ago. Revenue rose 24% to $433 million, with core advertising revenue down 11% to $164 million; $106 million in political advertising, up from $11 million a year ago, and distribution revenue up 5.4% to $160 million.
At Scripps Networks, segment profit fell to $80 million from $106 million a year ago. Revenue dropped 9.2% to $248 million as the national advertising marketplace softened, the company said.
The head of Scripps Networks, Lisa Knutson, was promoted to chief operating officer. No successor has been named.
Looking ahead to the first quarter, Scripps said it expects local media revenue to be down by mid-single digits and Scripps Networks revenue to be down by high-single digits.
“The Q1 guide indicates national ads are still challenged at Networks, dragging EBITDA guidance to about $62 million vs our $84 million estimate,” Wells Fargo analyst Steven Cahall said. ■
