The E.W. Scripps Company (NASDAQ:SSP) Q3 2023 Earnings Call Transcript November 3, 2023
The E.W. Scripps Company beats earnings expectations. Reported EPS is $-0.04327, expectations were $-0.14.
Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Third Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. Later, there will be time for questions. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the conference over to our host, Carolyn Micheli. Please go ahead.
Carolyn Micheli: Thanks, Don. Good morning, everyone, and thank you for joining us for a discussion of The E.W. Scripps Company's financial results and business strategies. You can visit scripps.com for more information and a link to the replay of this call. A reminder that our conference call and webcast include forward-looking statements and actual results may differ. Factors that may cause them to differ are outlined in our SEC filings. We do not intend to update any forward-looking statements we make today. Included on this call will be a discussion of certain non-GAAP financial measures that are provided as supplements to assist management and the public in their analysis and valuation of the company. These metrics are not formulated in accordance with GAAP and are not meant to replace GAAP financial measures and may differ from other companies' uses or formulations.
Included in our earnings release are the reconciliations of non-GAAP financial measures to the GAAP measures reported in our financial statements. We'll hear this morning from Scripps' President and CEO, Adam Symson; Chief Financial Officer, Jason Combs; and Scripps' Chief Operating Officer, Lisa Knutson. Here's Adam.
Adam Symson: Good morning, everybody. We're pleased today to be reporting third quarter financial results across the company that met or exceeded expectations. Our local ad sales teams executed at a high level despite a soft advertising marketplace. On the network side, Connected TV revenue growth continues to be a bright spot, while the direct response and general market sales teams held their own. In addition, careful expense management supported by the continued pursuit of a more efficient cost structure led to a stronger-than-expected segment profit number. Alongside the rest of the advertising industry, we do face further macroeconomic headwinds as we wind down this year. As you know, the national advertising upfront season was weak across the industry.
But as we head into the fourth quarter, we have seen some green shoots in the scatter market. Local Media core advertising is coming into the quarter strong with our four top categories up year-over-year. Jason and Lisa will give more color on the full advertising environment in just a moment. Despite the macroeconomic conditions that we are all contending with, I really like the Scripps set up for free cash flow growth over the year ahead and here's why. Number one, we have a robust new run rate for local media distribution dollars; number two, our local core and distribution revenue and national advertising revenue will benefit from continued disciplined expansion into sports rights, fueling organic growth; three, we are educating audiences about the appeal of free TV and making it easier than ever for people to watch it and for us to profit from it; fourth, we project double-digit growth in our networks connected TV advertising revenue; and fifth, we will benefit from the high-margin political ad revenue that broadcasters get as the primary beneficiaries of political ad spending, projected now at $10 billion for the coming presidential election year.
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