Q2 2016 – Scripps Networks Earnings Call Summary

Scripps

Below are my key takeaways from the Scripps Q2 2016 Earnings Call on Aug 9:

Summary:

Opening statement from Ken Lowe, CEO, was “Scripps Interactive again delivered another quarter of strong operating performance…”

Total operating rev +22% YoY to $893MM, consolidated advertising rev +29%, ad revenue for US networks +9% and crossed $500MM in the quarter for first time ever.  Consolidated adjusted segment profit up 14%.  Closed a record upfront.

HGTV was the number one network, in terms of revenue, at $283MM. Food Network was second with $241MM, followed by Travel Channel at $86MM, DIY at $47MM and Cooking Channel at $37.  All channels grew revenue in the quarter, except for DIY, which fell 2%.

Its networks are distributed in 175 countries and territories and broadcast in 29 languages reaching  300 cumulative subscribers.  International revenue grew thanks to inclusion of TVN Poland, a leading multi-platform media business.

HGTV had highest rated second quarter in network history among all key demos, and continued to be #1 in capturing upscale women 25-54.  Grew to 5.4MM Facebook likes and  1.4mm Instagram followers.

Food Network saw +4% growth YoY among total day 25-54 viewers. Crossed over 10MM Facebook likes, over 3MM Instagram followers,  and over 1MM Snapchat followers.

Travel Channel had three consecutive quarter of YoY growth, saw primetime growth of +11% among adults 25-54, with ratings growing in 6 out of 7 nights of the week.  Time spent viewing increased by 10 minutes and its Dive Into Summer programming was a huge success, driving double digit Sunday prime ratings increases over the quarter. On social media, they have over 2MM followers on Twitter, nearly  2MM likes on Facebook and over 1MM followers on Instagram.

DIY Network was strong with A25-54 thanks to shows like Barnwood Buildings and the Vanilla Ice Project.

Great American Country grew ratings more than 50%, having it’s best quarter in 9 years.

In International, TVN Poland saw revenue up mid single digits and total commercial audience share up 3%. HDTV now in the Middle East and Africa.

Olympic counter programming has gone as planned and it’s too early to tell if the games are having an impact.

Financials (In millions) Q2 2016 Q2 2015 % Diff
Total Revenue  $893  $732 21.9%
 – Ad Rev  $647  $503 28.6%
 – Distribution Rev  $223  $215 3.8%
 – Other Rev  $23  $14 62.0%
Operating Income  $373  $332 12.3%
Net Income  $233  $246 -5.2%
Basic EPS  $1.42  $1.50 -5.3%

 

Rev by Network (In millions) Q2 2016 Q2 2015 % Diff
HGTV  $283  $272 4.0%
Food Network  $241  $228 5.6%
Travel Channel  $86  $82 5.1%
DIY Network  $47  $48 -2.1%
Cooking Channel  $37  $35 4.9%
Great American Country  $8  $8 1.5%
Digital Businesses  $41  $34 19.2%

List of Key Properties:

Forward Thinking:

  • Continue global rollouts of key networks, especially HGTV in Europe and Food Network and Travel Channel coming to Israel
  • Will see programming spend stay consistent, with no sports to worry about cost increases.
  • Not as worried about cord cutting because its audience is generally 35+, and it’s generally younger demo that is pushing this trend
  • Not thinking about content or network consolidation or adding to the mix, since their 6 networks bring high quality, family-friendly programming with strong ratings and favorable audiences to the negotiating table,  when compared to other companies

Links to Company Website:

Please comment below if there are data points from Scripps Networks you’d like me to include in their next Earnings Call Summary.

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