Scripps Networks Interactive Inc. (SNI) reported better-than-expected financial results for the first quarter of 2014. Quarterly GAAP net income stood at $128.3 million or 87 cents per share compared with $107.9 million or 72 cents per share in the prior-year quarter.
Earnings per share of 87 cents breezed past the Zacks Consensus Estimate of 81 cents. Quarterly total revenue of $643.8 million increased 8.3% on an annualized basis and was almost in line with the Zacks Consensus Estimate of $643 million.
The first-quarter 2014 gross profit came in at $462.6 million against $430.6 million in the prior-year quarter. Quarterly gross margin was 71.9% compared with 72.5% in the year-ago quarter.
Quarterly operating income increased 9% year over year to $239.6 million. Operating margin, in the reported quarter, was 37.2% against 37% in the prior-year quarter. In the reported quarter, Scripps Networks repurchased 3.1 million shares for a consideration of $250 million.
During the first quarter of 2014, Scripps Networks generated $218.3 million of cash from operations compared with $268.1 million in the year-earlier quarter. Free cash flow, in the reported quarter, was $209.1 million against $250.6 million in the prior-year quarter.
At the end of the first quarter of 2014, Scripps Networks had $509.1 million in cash & marketable securities and $1,384.6 million of outstanding debt on its balance sheet compared with $686.4 million in cash & marketable securities and $1,384.5 million of outstanding debt at the end of 2013. At the end of the reported quarter, the debt-to-capitalization ratio stood at 0.18 compared with 0.39 at the end of 2013.
Lifestyle Media Segment
Quarterly revenues came in at $623.5 million, reflecting an annualized growth of 7.6%. Within this segment, Advertisement revenues climbed 8.9% year over year to $426 million. Network Affiliate fee revenues were $190.2 million, up 6.3% year over year. Other revenues decreased 21.4% year over year to $7.3million. Total segment profit was $311 million, up 10.8% from the prior-year quarter.
Brand wise, HGTV revenues were approximately $227.2 million, up 10.6% year over year. Food Network revenues came in at $219 million, reflecting a 5.5% hike year over year. Travel Channel revenues totaled $79.7 million, up 4% year over year. DIY Network revenues were $35.1 million, up 10.6% year over year.
Cooking Channel revenues were $28.3 million, up 8.1% year over year. Great American Country revenues stood at $7.1 million, up 10.9% year over year. SN Digital revenues increased 5.9% year on year to around $24 million. Other revenues totaled $3.3 million, down 16.3% year over year.
Quarterly total revenue of $21 million was up 40.9% year over year. Operating loss in the segment was $40.2 million, up 21.6% year over year.
Scripps Networks expects revenues for full-year fiscal 2014 to rise 6–8% while cost of service is anticipated to increase in the range of 11–13%. Likewise, selling, general and administrative costs are projected to remain flat or grow 2% year over year.
Other Stocks to Consider
Scripps Networks currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the media industry which warrant a look include Saga Communications Inc. (SGA), LIN Media LLC. (LIN) and Entravision Communications Corp. (EVC). All three stocks have a Zacks Rank #2 (Buy).Read the Full Research Report on SNI
Read the Full Research Report on LIN
Read the Full Research Report on SGA
Read the Full Research Report on EVC
Zacks Investment Research
- Finance Trading
- Investment & Company Information
- Scripps Networks