Scripps Swings to Profit on Political Ads
CINCINNATI (
) --
E.W. Scripps
(SSP) - Get Report
swung to a profit during the third quarter, driven by strong gains in its television segment due to a surge in political advertising.
For the third quarter ended September 30, the company swung to a profit of $6.2 million, or 8 cents per diluted share, compared with a loss of $3.3 million, or 11 cents per share, in the same period a year ago. Excluding special items, earnings were 10 cents per share, ahead of analyst estimates of 8 cents.
Operating revenue rose 8.6% to $183.6 million from $169.1 million during the quarter driven by a 31.3% increase in its television segment revenue.
"The flow of advertising dollars back into local television continues at an encouraging pace, attracted in part by our commitment to delivering larger and more engaged audiences through a determined focus on high-quality local news content," president and CEO Rich Boehne said. "Many of our key television advertising categories have bounced back to pre-2009 levels."
The increase in local and national advertisement revenue was due to a surge in political advertising as well as improved spending by automotive advertisers.
The company's newspaper segment saw revenue down 3.8% to $100.4 million from $104.4 million as print advertising revenue dropped 6.8%. Newsprint and publishing expenses rose 11% due to the 30% rise in the price of newsprint.
The company offset some of its printing losses by reducing the number of employees, bringing employee costs down 4%. In the third quarter the number of full time employees at Scripps newspapers was 7.2% lower than one year prior.
For the first nine months of the year, Scripps swung to a profit of $104.9 million, or 8 cents per share, compared with a loss of $221.7 million, or $3.93 a share, in the same period a year ago. Revenue rose 3.9% to $556.7 million from $535.9 million.
Management expects the business trends to carry over into the fourth quarter. The company forecasts a 35% to 40% year-over-year growth in television ad revenues in the fourth quarter, including $28 million in political advertising.
The newspaper division is expected to continue seeing a moderation in the decline of ad revenues. Total newspaper expenses are expected to rise slightly driven by increases in newsprint costs.
-- Written by Theresa McCabe in Boston.
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