(AP) Rapid advertising growth in its cable television networks and increased political advertising on broadcast TV stations helped raise the E.W. Scripps Co.’s second-quarter earnings by 34%, the company reported Thursday.
Scripps earned $86.4 million, or $1.05 per share, in the quarter that ended June 30, compared with $64.7 million, or 80 cents per share, in the same period a year ago.
The company’s newspaper revenues were $175 million during the second quarter, up about 1% over the year-ago period, with ad revenues rising 1.9% to $139 million, led by a 7.1% increase in “preprint and other” revenue. But the newspaper division’s profits declined 13% to $58.6 million, which the company attributed, in part, to “a general softness in local retail and automotive advertising, higher employee benefit costs and higher newsprint prices.”
Newspaper profits were also pinched by a $2.5 million accrual the company recorded as a result of a court judgment involving The Birmingham News Co., publisher of the two daily newspapers in Birmingham, Ala. “The Scripps newspaper, the Birmingham Post-Herald, is the minority, non-managing partner under a joint operating agreement with The Birmingham News Co.,” Scripps said in a statement. “In June the Alabama Supreme Court upheld an arbitration panel’s decision in favor of former contract newspaper carriers who challenged actions by The Birmingham News Co. that resulted in agreements with The Birmingham News Co. either not being renewed or being terminated before normal expiration.”
“At our newspapers, revenues grew modestly during the quarter but increased healthcare costs for our employees and higher newsprint prices teamed up to hold back profits,” said Kenneth W. Lowe, president and CEO. “Newspaper profits also were affected by a persistent general softness in local retail advertising, especially in the department store category. Some of that softness was offset by a healthy return of help-wanted advertising and advertising revenue from our Web sites and other developing newspaper initiatives.”
Profits at Scripps Networks increased 56% to $87.5 million, up from $55.9 million a year ago. Scripps Networks includes the Home & Garden Television, Fine Living, Food Network and DIY — Do-It-Yourself cable channels.
Excluding special gains on sale of real estate in a relocation of the company’s Cincinnati television station, Scripps earned 97 cents per share, a penny less than the estimates of analysts surveyed by Thompson First Call.
Revenues increased about 15% to $547.3 million, up from $474.8 million in the second quarter of 2003.
For the first six months, the Cincinnati-based company earned $157 million, up 34% from $117.4 million last year. Earnings per share were $1.91, compared with last year’s $1.45. Deducting the gain from the real estate sale, earnings for this year’s first half would have been $1.83 per share.
In addition to TV stations, cable channels and newspapers, the company operates four cable and satellite television programming services; the Shop at Home retailing channel, Scripps Howard News Service and United Media, which licenses and syndicates the Peanuts and Dilbert comic strips.
The company’s shares were off $1.00 at $102.00 in early trading on the New York Stock Exchange.