E.W. Scripps swung to a profit in the first quarter following losses a year ago caused by the pandemic and acquisitions.
Net income was $9.8 million, or 10 cents a share. A year ago, the company reported a loss of $6 million or 7 cents a share.
Revenue rose 4.6% to $566 million.
Scripps’ local media segment’s profit slipped to $54.4 million from $55.9 million a year ago. Revenue was up 4.5% to $327 million. Core ad revenue rose 3.4% to $157 million and political revenue was $5.8 million, compared to $1.3 million a year ago. Retransmission revenue rose 2.5% to $160 million.
Scripps Networks profit fell to $85.1 million from $92.2 million a year ago. Revenue rose 12% to $238 million reflecting the launch of new channels Defy TV and TrueReal, plus the acquisition of Ion last January.
Expenses at Scripps Networks were up 27% to $154 million because of the cost of launching new networks, investments in programming and high costs tied to revenue growth.
Also: Scripps Networks Pitch Value of Free Over-the-Air Viewing
“Once again in the first quarter, Scripps delivered outstanding financial results, despite the macro-economic environment. We carried our 2021 momentum into this year, with superb sales execution as well as a disciplined approach to expenditures across the company, resulting in significant ad sales growth and strong segment profit,” said CEO Adam Symson.
Symson said that Scripps local media unit saw growth in key advertising categories because of its focus s on winning new-to-TV advertising dollars. “Local Media’s strong start provides a springboard for the rest of the year as we anticipate a robust mid-term political revenue cycle," he said.
Primetime ratings rose 5% at Scripps’ networks unit powering ad revenue growth of 8.5% and a 36% profit margin.
“The Scripps strategy around free, ad-supported television is resonating with consumers as they gravitate toward simplicity, savings and efficiency,” Symson said. “Recent reports from Nielsen, Kantar and Horowitz Research all found fatigue with the cost and complexity of navigating plus-services, and we believe free, over-the-air television and other free, ad-supported platforms are the solutions they are seeking. Inflation, the consumers’ plus fatigue, subscription video on demand (SVOD) subscriber churn and Wall Street’s recent reckoning with the SVOD model all work in our favor.”
Looking ahead, Scripps said it expects local media revenue to be up about 10% with expenses up low single digits in the second quarter, and it sees revenue at the networks unit up low single digits with expenses climbing by about 20%.
“Q1 results appear solid, but we're curious if the weaker Q2 Networks guide reflects some slowdown in national ad spend, said analyst Steven Cahall of Wells Fargo.
“Ad slowdowns are a concern for investors and could certainly create some distance in relative performance between Scripps and its pure-play local broadcast peers.”■
