Scripps Networks Interactive Inc. (SNI) reported adjusted earnings of 72 cents for the first quarter of 2013, which fell below the Zacks Consensus Estimate of 74 cents. Quarterly GAAP net income from continuing operations was $107.8 million or 72 cents per share compared with $114.9 million or 74 cents per share in the prior-year quarter. Quarterly total revenue of $594.4 million increased 11.0% on an annualized basis, and was also ahead of the Zacks Consensus Estimate of $580 million.
The first-quarter 2013 gross profit was $430.6 million compared with $397.6 million recorded in the prior-year quarter. Quarterly gross margin was 72.4% compared with 74.3% in the prior-year quarter. Quarterly operating income increased 2.4% year over year to $219.8 million. Operating margin in the reported quarter was 37.0% compared with 40.1% in the prior-year quarter.
At the end of the first quarter of 2013, Scripps Networks generated $268.1 million of cash from operations compared with $208.2 million in the prior-year quarter. Free cash flow at the end of the first quarter was $160.7 million compared with $153.0 million at the end of the same period last year. At the end of the first quarter, Scripps Networks had $421.2 million in cash & marketable securities and $1,384.3 million of outstanding debt on its balance sheet compared with $437.5 million in cash & marketable securities and $1,384.2 million of outstanding debt at the end of 2012. At the end of the reported quarter, the debt-to-capitalization ratio was 0.44 compared with 0.43 at the end of 2012.
Lifestyle Media Segment
Quarterly revenues came in at $581.0 million, showing an annualized growth of 9.9%. Within this segment, Advertisement revenues climbed 10.0% year over year to $391.2 million. Network Affiliate fee revenues were $180.6 million, up 8.5% year over year.Other revenues leaped 36.1% year over year to $9.3 million. Total segment profit was $247.4 million, up 3.4% year over year.
Brand wise, HGTV revenues were approximately $206.0 million, up 10.9% year over year. Food Network revenues were $208.3 million, up 4.8% year over year. Travel Channel revenues were was $76.7 million, up 15.1% year over year. DIY Network revenues were $31.9 million, up 15.4% year over year. Cooking Channel revenues were $26.3 million, up 32.7% year over year. Great American Country revenues were $6.4 million, up 28.2% year over year. SN Digital revenues increased 0.9% annually to $22.6 million. Other revenues were $3.9 million, up 47.2% year over year.
Quarterly total revenue of $13.3 million was up by a whopping 97.3% year over year. However, the loss in the segment was $34.6 million, up 36.4% year over year.
Other Stocks to Consider
Scripps Networks currently has a Zacks Rank #3 (Hold). Other stocks in the Media/Broadcast industry include Entravision Communications Corp. (EVC), LIN TV Corp. (TVL) and Discovery Communications Inc. (DISCA).
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