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Scripps Networks (SNI) Down Despite Earnings Beat in Q2
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Scripps Networks Interactive Inc. reported mixed results in the second quarter of 2016, with earnings beating estimates and revenues missing the mark. The company’s earnings (excluding special items) of $1.58 per share beat the Zacks Consensus Estimate of $1.48. The bottom line also expanded 7.5% on a year-over-year basis.
On the other hand, the company’s second-quarter 2016 operating revenues of $892.8 million missed the Zacks Consensus Estimate of $904 million. However, the top line grew 21.9% on a year-over-year basis. The revenue miss seems to have irked investors, resulting in a drop in share price during early trading.
Second-quarter consolidated segment profits (on an adjusted basis) totaled $419.3 million, up 13.9%. Quarterly operating income (on a reported basis) was up 12.3% year over year to $373 million. At the end of the reported quarter, the company has $449.8 million of cash from operations compared with $322.7 million at the end of the first quarter of 2016. Free cash flow at the end of the first half of 2016 was almost $299.9 million compared with $231.5 million at the end of the first six months of 2015.
At the end of the quarter under review, Scripps Networks had $185.9 million in cash & cash equivalents and $2,877.5 million of outstanding debt (less current portion) on its balance sheet compared with $223.4 million and $3,511.1 million, respectively, at the end of 2015. The debt-to-capitalization ratio stood at 0.57 versus 0.66 at the end of 2015. The company reiterated its previously issued outlooks for all the metrics.
Segmental Performance
U.S. Networks
Quarterly revenues came in at $752.3 million, up 5.2% year over year. Within this segment, Advertisement revenues climbed 8.9% year over year to $541 million. Segmental advertising revenues exceeded the $500 million level for the first time, reflecting the strength of the advertising market for the company’s lifestyle offerings. Distribution revenues were $196.1 million, down 3.6% year over year due to erosion in subscribers’ base.
Other revenues increased 3.3% year over year to $15.3 million. Segmental (adjusted) profits came in at $404.9 million, up 1.1% year over year.
Brand-wise, HGTV, Food Network, Travel Channel, Cooking Channel, Great American Country, Digital Business and Other revenues improved 4%, 5.6%, 5.1, 4.9%, 1.5%, 19.2% and 7.8% year over year, respectively. However, DIY Network revenues dropped 2.1% year over year.
International Networks
Quarterly total revenue of $147 million reflected a substantial increase from the year-ago figure of $22.1 million. The upside was driven by the inclusion of TVN results. Segmental adjusted profits totaled $37.4 million as against a loss of $10.1 million a year ago.
Currently, Scripps Networks has a Zacks Rank #3 (Hold). Better-ranked stocks in the broader Consumer Discretionary sector include Discovery Communications , Deckers Outdoor Corp. (DECK - Free Report) and Diamond Resorts International . All three stocks carry a Zacks Rank #2 (Buy).
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Scripps Networks (SNI) Down Despite Earnings Beat in Q2
Scripps Networks Interactive Inc. reported mixed results in the second quarter of 2016, with earnings beating estimates and revenues missing the mark. The company’s earnings (excluding special items) of $1.58 per share beat the Zacks Consensus Estimate of $1.48. The bottom line also expanded 7.5% on a year-over-year basis.
On the other hand, the company’s second-quarter 2016 operating revenues of $892.8 million missed the Zacks Consensus Estimate of $904 million. However, the top line grew 21.9% on a year-over-year basis. The revenue miss seems to have irked investors, resulting in a drop in share price during early trading.
Second-quarter consolidated segment profits (on an adjusted basis) totaled $419.3 million, up 13.9%. Quarterly operating income (on a reported basis) was up 12.3% year over year to $373 million. At the end of the reported quarter, the company has $449.8 million of cash from operations compared with $322.7 million at the end of the first quarter of 2016. Free cash flow at the end of the first half of 2016 was almost $299.9 million compared with $231.5 million at the end of the first six months of 2015.
At the end of the quarter under review, Scripps Networks had $185.9 million in cash & cash equivalents and $2,877.5 million of outstanding debt (less current portion) on its balance sheet compared with $223.4 million and $3,511.1 million, respectively, at the end of 2015. The debt-to-capitalization ratio stood at 0.57 versus 0.66 at the end of 2015. The company reiterated its previously issued outlooks for all the metrics.
Segmental Performance
U.S. Networks
Quarterly revenues came in at $752.3 million, up 5.2% year over year. Within this segment, Advertisement revenues climbed 8.9% year over year to $541 million. Segmental advertising revenues exceeded the $500 million level for the first time, reflecting the strength of the advertising market for the company’s lifestyle offerings. Distribution revenues were $196.1 million, down 3.6% year over year due to erosion in subscribers’ base.
Other revenues increased 3.3% year over year to $15.3 million. Segmental (adjusted) profits came in at $404.9 million, up 1.1% year over year.
Brand-wise, HGTV, Food Network, Travel Channel, Cooking Channel, Great American Country, Digital Business and Other revenues improved 4%, 5.6%, 5.1, 4.9%, 1.5%, 19.2% and 7.8% year over year, respectively. However, DIY Network revenues dropped 2.1% year over year.
International Networks
Quarterly total revenue of $147 million reflected a substantial increase from the year-ago figure of $22.1 million. The upside was driven by the inclusion of TVN results. Segmental adjusted profits totaled $37.4 million as against a loss of $10.1 million a year ago.
SCRIPPS NETWRKS Price, Consensus and EPS Surprise
SCRIPPS NETWRKS Price, Consensus and EPS Surprise | SCRIPPS NETWRKS Quote
Zacks Rank & Stocks to Consider
Currently, Scripps Networks has a Zacks Rank #3 (Hold). Better-ranked stocks in the broader Consumer Discretionary sector include Discovery Communications , Deckers Outdoor Corp. (DECK - Free Report) and Diamond Resorts International . All three stocks carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>