E.W. Scripps Profit Hurt on Discontinued Operations Charges

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By: AP and E&P Staff

Media company E.W. Scripps Co. said Tuesday its third-quarter profit fell 11 percent, hurt partly by charges stemming from its sale of TV stations that were part of its Shop At Home network.

Net income slipped to $73.1 million, or 44 cents per share, for the three months ended Sept. 30 compared with $82.2 million, or 50 cents per share, a year ago. Revenue rose 13 percent to $583.4 million from $515.3 million.

Analysts polled by Thomson Financial were looking for earnings of 40 cents per share on sales of $584.1 million.

Scripps recorded a loss of $5.4 million in the quarter for discontinued operations that included a $4.9 million charge on the intangible assets associated with the sale of five television stations.

The company sold the Shop At Home television network in June and announced in September that it had reached an agreement to sell its five Shop At Home-affiliated TV stations for $170 million. That deal is expected to be completed during the first half of 2007.

At the company?s newspaper division, total revenue for the quarter was up 0.8% to $168 million for newspapers managed solely by Scripps. Advertising revenue grew 0.7% to $134 million.

Local advertising revenue was up 0.6% to $35.4 million. Classified revenue dropped 0.7% to $54.1 million. National plummeted 22% to $8.2 million. Preprint, online, and other increased 10% to $36.1 million.

Online advertising rose 40%.

Circulation revenue advanced 1.8% to $30.5 million.

Newsprint expenses grew 3.8% on a 7% increase in newsprint prices.

Total newspaper segment profit was down $39.7 million compared with $41.6 million for the same period a year ago. The company attributed the decrease to continuing investments in online initiatives and new products.

For newspapers under a joint operating agreement, the company reported an increase in segment profit of $1.6 million compared to a loss of $1.8 million for the same period last year. However, the gain was made because of lower depreciation costs related to an ongoing capital improvement project. The advertising environment in Denver is still soft.

For the company?s interactive division, total revenue Shopzilla and uSwitch was $60.9 million. On a pro forma basis, if the company had owned both online properties since Jan. 1, 2005, combined revenue grew 50%.

Revenue from the company’s Scripps Networks increased 19 percent to $249 million. Sales from newspapers managed solely by Scripps rose 1 percent to $168 million.

The company said it expects fourth-quarter earnings from continuing operations to be between 67 cents and 71 cents per share.

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