Scripps Networks Interactive Inc. (SNI) reported mixed financial results for the third quarter of 2013. Quarterly GAAP net income stood at $129 million or 87 cents per share compared with $118.4 million or 78 cents per share in the prior-year quarter. Third-quarter earnings per share of 87 cents outpaced the Zacks Consensus Estimate of 84 cents. Quarterly total revenue of $616.9 million increased 9% on an annualized basis, but lagged the Zacks Consensus Estimate of $619 million.
The third-quarter 2013 gross profit came in at $438.7 million against $409.9 million in the prior-year quarter. Quarterly gross margin was 71.1% compared with 72.4% in the prior-year quarter. Quarterly operating income increased 4.7% year over year to $232.4 million. Operating margin, in the reported quarter, was 37.7% against 39.2% in the prior-year quarter. In the reported quarter, Scripps Networks repurchased 46,000 shares for a total consideration of approximately $3.1 million.
During the third quarter of 2013, Scripps Networks generated $255.3 million of cash from operations compared with $187.3 million in the prior-year quarter. Free cash flow, in the reported quarter, was $224.6 million against $157 million in the prior-year quarter.
At the end of the third quarter of 2013, Scripps Networks had $556.6 million in cash & marketable securities and $1,384.4 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 0.38 compared with 0.43 at the end of 2012.
Lifestyle Media Segment
Quarterly revenues came in at $594.9 million, reflecting annualized growth of 7.8%. Within this segment, Advertisement revenues climbed 7.5% year over year to $402.7 million. Network Affiliate fee revenues were $183.3 million, up 8.9% year over year. Other revenues decreased 0.9% year over year to $8.9 million. Total segment profit was $291.3 million, up 6.7% from the prior-year quarter.
Brand wise, HGTV revenues were approximately $219.1 million, up 12.1% year over year. Food Network revenues were $202.4 million, up 1.8% year over year. Travel Channel revenues were $77.3 million, up 12.2% year over year. DIY Network revenues were $34 million, up 13.8% year over year. Cooking Channel revenues were $26.7 million, up 23.3% year over year. Great American Country revenues were $6.6 million, down 5.5% year over year. SN Digital revenues decreased 6.5% annually to $25.9 million. Other revenues were $3.1 million, up 16.1% year over year.
Quarterly total revenue of $23.2 million was up by a whopping 62.5% year over year. However, the loss in the segment was $29.3 million, up 33.4% year over year.
Other Stocks to Consider
Scripps Networks currently has a Zacks Rank #3 (Hold). Other stocks in the Media/Broadcast industry worth considering include Salem Communications Corp. (SALM), LIN TV Corp. (TVL) and Nexstar Broadcasting Group Inc. (NXST). All three stocks currently carry a Zacks Rank #2 (Buy).