10 Nov

Scripps Networks Interactive: Revenues Increased in 3Q15

WRITTEN BY Shirley Pelts

Scripps Networks Interactive reports 3Q15 results

Scripps Networks Interactive (SNI) announced its 3Q15 earnings on November 9, 2015. Scripps had 3Q15 revenues of $776.1 million, a growth of 20.4% over 3Q14. The company’s revenues for 3Q15 included advertising revenues of $527.9 million, an increase of 22.2% over 3Q14.

SNI’s affiliate fee revenues of $224.9 million indicated a rise of 13.5% year-over-year. The company had a total segment profit of $312.3 million, a growth of 15.7% over 3Q14.

Scripps Networks Interactive: Revenues Increased in 3Q15

Scripps had a net income of $124.6 million, a 5% decline over 3Q14. The company had a diluted EPS (earnings per share) of $0.96 in 3Q15 compared to its 3Q14 diluted EPS of $0.93. According to the company’s earnings release on November 9, 2015, its 3Q15 earnings were impacted by “$5.3 million after tax, or $0.04 per share, of foreign currency effects on TVN funds; $5.2 million after tax, or $0.04 per share, of TVN transaction and integration expenses; and $2.0 million after tax, or $0.02 per share, of restructuring charges.”

Excluding these one-time charges or items, Scripps had a net income of $137.6 million in 3Q15 and a diluted EPS of $1.06 per share. The company’s diluted EPS of $1.06 in 3Q15, excluding one-time charges, exceeded consensus Wall Street analysts’ expectations by 8.2%.

TVN acquisition

In July 2015, Scripps acquired N-Vision, a Dutch company for $1.6 billion. N-Vision holds a 52.7% stake in TVN. The acquisition consisted of $652.4 million in cash and $956.2 million of assumed debt.

This acquisition resulted in Scripps having two segments: US Networks (previously called Lifestyle Media) and International Networks.

Forecast for fiscal 2015

Scripps expects its revenues to grow 13% in fiscal 2015. The company’s depreciation and amortization expense is expected to be $145 million in fiscal 2015. Its acquisition of TVN resulted in interest expenses to increase to $110 million in fiscal 2015.

US Networks results

Scripps’ US Networks segment had revenues of $660.9 million in 3Q15, a growth of 6.2% over 3Q14. The increase in revenue was primarily driven by a rise in its advertising revenues and affiliate fees. US Networks had a segment profit of $330.3 million, a rise of 12.2% over 3Q14.

International Networks

The International Networks segment had revenues of $118.7 million in 3Q15, a phenomenal growth from its 3Q14 revenues of $23.8 million. This revenue growth was mainly driven by the acquisition of TVN in July 2015.

The acquisition of TVN also resulted in Scripps’ International Networks segment turning profitable for the first time in 3Q15. This segment had a profit of $10.9 million in 3Q15, as compared to a loss of $5.9 million in 3Q14.

Scripps makes up 0.22% of the Guggenheim S&P 500 Equal Weight ETF (RSP). RSP also holds 0.27% of Nvidia (NVDA), 0.26% of Sandisk (SNDK), and 0.26% of Autodesk (ADSK).

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