Scripps Dips After Street Slip
The E.W. Scripps Co. turned it around in Q3, swinging to net income of $12.5 million (15 cents per share) from a net loss of $24.4 million (-29 cents) in the same period a year ago.
Unfortunately, the turnaround wasn’t good enough, as the TV and radio owner fell short of the average estimates of a trio of analysts surveyed by Zacks Investment Research of +29 cents.
Investors punished Scripps shareholders by selling shares on Friday. Shares of SSP fell 3.2% to $12.62.
What’s the key reason for the less-than-anticipated turnaround?
Blame Hillary and The Donald.
“This uncommon – if not downright unique – presidential election, combined with key Senate races in Ohio, Florida, Colorado and Wisconsin becoming far less competitive than forecast, leaves us with much less political advertising revenue than we expected,” said Chairman/CEO and President Rich Boehne. “Political spending was healthy further down the ticket and across the country, but presidential spending in some typically crucial swing states was roughly half of what we saw four years ago, reducing the opportunity for some Scripps stations.”
Revenues increased 23%, to $233 million, thanks primarily to increases in retransmission revenue, political advertising revenue and our growing digital businesses.
But the trio of analysts surveyed by Zacks expected $255.2 million.
Breaking it down by segment, revenue at Scripps’ television group climbed 25%, to $197 million in Q3. Profit for the television division increased from $31.7 million to $58.3 million.
Radio proved to be a weak spot for Scripps. Segment revenue slipped from $20.4 million to $19.3 million, as 2016 expenses included about $500,000 of costs for flood cleanup efforts in Wichita, Kan. Profit in the radio division shrunk from $4.1 million to $2.5 million in Q3.
For Q4, Scripps expects radio revenue down by low-single-digit percentages, while TV revenue will be up in the mid-30% range.
E.W. Scripps shares have declined 31% year-to-date.