Scripps' Newspaper Revenue Up 3.7% in Q4

By: E&P Staff E.W. Scripps reported today that consolidated operating revenue for Q4 grew 17% to $707 million compared with the same period last year. On a pro forma basis, as if Scripps had owned Shopzilla in 2004, operating revenue increased 12%.

The company recorded a $90.6 million non-cash, after tax charge in Q4 reflecting a write-down of goodwill and other intangible assets related to its Shop At Home electronic commerce subsidiary. The write-down is the result of continuing operating losses at Shop At Home and a longer than previously anticipated path to profitability. Scripps is in the process of exploring strategic alternatives for Shop At Home.

As a result, Scripps reported a net loss of $603,000 for Q4 compared with net income of $91.3 million, or $.55 per share compared to the same quarter a year ago.

Fourth quarter net loss also includes the non-cash effect of the decision earlier in the year to consolidate newspaper production operations in Denver.

At Shopzilla, segment profit was $20.3 million on revenue of $63.2 million.

At the newspaper division, total revenue grew 3.7% to $192 million. Advertising revenue at newspapers managed solely by Scripps was up 5.1% to $155 million.

Local advertising revenue was up 3.4% to $47.6 million. Classified grew 5.4% to $54 million. National was down 4.3% to $11.3 million. Preprint and other, including online, increased 9.4% to $42.4 million.

Newspaper division segment profit during Q4 was $55.4 million compared with $69.1 million during the same period last year. Much of the decline is due to the higher depreciation expense in Denver, which reduced the company's equity in income from the Denver Newspaper Agency by $11.3 million.

Scripps, which owns the Rocky Mountain News, and MediaNews Group, which owns The Denver Post, are partners in a joint operating agreement. Each shares 50% of the combined profits.

Circulation revenue decreased 2.2% to $31.9 million.

Newsprint expense increased 6.8% on a 13% increase in newsprint prices.

For the Q1 this year, total newspaper revenue is expected to be up 3% to 5% over the same period a year ago. Total newspaper expenses are expected to increase 10% to 13%.

First quarter earnings per share are expected to be between $.38 and $.42, including the effect of expensing stock options granted to employees. EPS during Q1 2005 were $.42.