E.W. Scripps reported lower net income in the third quarter as well as slower-than-expected advertising growth at both its stations and national networks.
Net income dropped to $33.7 million, or 38 cents a share, from $46.1 million, or 50 cents a share, a year ago, when the company had a $32.6 million gain from the sale of its station’s building in Denver. Segment profit was up 13%, the company said.
Revenues rose 10.2% to $612.1 million.
Scripps’s local media unit’s profit rose 52% to $99.6 million. Revenues rose 14.2% to $378.4 million. Core advertising revenue — excluding political advertising — fell 12% to $147 million. Scripps collected $63.2 million in political advertising in the quarter and has brought in $208 million this year through Election Day.
Due to the unexpected shift in political ad spending away from some Scripps markets as well as the ongoing macroeconomic challenges, Scripps adjusted its 2022 free-cash-flow expectation to about $320 million from approximately $400 million.
Retransmission revenue was up 7% to $165 million.
Profits at Scripps’s national networks division fell 13.6% to $71.984 million. Revenues rose 3.9% to $3.9 million.
Weakness in the national advertising market is continuing to impact Scripps Networks revenues, the company said.
Connected TV revenue for the Scripps Networks division was up 57% and the company said it expects to reach an annual run rate of $100 million in CTV revenue in 2023.
For the fourth quarter, Scripps said it expects local media revenue to be up in the mid-20% range and local media expenses to be up in the mid-single-digit range. The company expects the Scripps Networks unit’s revenue to be down mid-to-high single digits, with expenses about flat.
“Scripps’ impressive 10% revenue growth in the third quarter was fueled in part by the company’s multiplatform distribution strategy — to ensure viewers can find our high-quality programming content anywhere they watch TV,“ CEO Adam Symson said “We have now launched our free, ad-supported TV (FAST) networks across major connected TV services, and in the third quarter, that paid off with a solid beat of Scripps Networks’ revenue expectations. We’re just getting started and expect that strategy to fuel continued revenue growth against an impressive run rate.
“In the midst of an economic climate that is challenging consumer spending and confidence, Scripps is leaning into its leadership in free TV to benefit the company and shareholders,” Symson said.
“In Local Media, we achieved a record level of political advertising revenue for a midterm election, despite less spending than we expected for key races in our Florida and Montana markets,” Symson added. “We know that political campaigns continue to rely greatly on local broadcasters to share their messaging with voters, and we have full confidence campaigns and PACs will return to us during the 2024 presidential election cycle and beyond.” ■
