Close

E.W. Scripps Co. (SSP) Misses Q1 EPS by 6c, Revenues Miss

May 8, 2020 7:31 AM EDT

E.W. Scripps Co. (NASDAQ: SSP) reported Q1 EPS of ($0.15), $0.06 worse than the analyst estimate of ($0.09). Revenue for the quarter came in at $430.91 million versus the consensus estimate of $435.8 million.

Business highlights

  • As the pandemic spread across the United States, Scripps successfully transitioned to a remote workforce without missing any news broadcasts and with minimal impact to business continuity.
  • In Local Media, retransmission revenue grew 21% on an adjusted combined basis in the first quarter as the company reset its Comcast contract on Jan. 1 and then another major contract on March 1. Subscriber households remained stable from the third quarter to the fourth quarter of 2019, the most recent data available.
  • Political advertising revenue for Q1 outpaced our expectations at nearly $19 million, and the company's 2020 election-year spending outlook remains robust.
  • In the first quarter, the National Media division once again achieved record revenue levels as well as ongoing margin expansion as it delivered nearly $12 million in segment profit.
  • The Katz networks and Newsy saw significant audience growth in March as stay-at-home orders spread across the country and Americans turned to television for information and entertainment. Both Katz and Newsy finished the quarter at 30% year-over-year revenue growth.
  • Expenses for both the Local Media and National Media divisions fell significantly below first-quarter guidance, and the company expects to see continued expense reductions in the second quarter. The company has frozen merit pay increases and hiring, reduced or eliminated capital projects and other general expenses and also reduced executive pay and board fees in reaction to the impact of the economic crisis.
  • Scripps expects cash flow from operations will be sufficient to meet the company's operating needs for the next 12 months. In addition, the company's liquidity is enhanced through the federal government's stimulus measures, including the deferral of social security taxes and pension contributions and tax relief on the use of net operating losses and interest expense limitations.

Commenting on recent business highlights, Scripps President and CEO Adam Symson said:

"The year got off to an outstanding start before the impact of COVID-19 on the last two weeks of March. We saw record segment profit and margin expansion in Local Media, a doubling of the segment profit in National Media over prior year, and the company's best first-quarter results since we spun off Scripps Networks Interactive in 2008. We view these financial results as an affirmation of the plan we have been executing that strengthens and improves the company's operating profile.

"As the coronavirus outbreak began to spread this spring, Scripps homed in on three priorities: protecting the health and well-being of our 6,000 employees; serving our audiences and communities with news and entertainment; and maintaining business continuity and strong financial stewardship. While our second quarter will be impacted by the soft advertising environment that comes as a result of this crisis, I am confident the work we are doing now sets us up for success with our audiences and advertisers.

"Our strong relationship with our local communities was evident in March as viewers turned to our local news in record growth numbers. In some time periods, audiences grew up to 70% in one week. Because of our stations' decades of service to their cities, Americans know they can trust us to provide locally focused, objective coverage of COVID-19 and its impact. We also created content and advertising campaigns focused on supporting local businesses and restaurants as well as information to help our audiences find job search and other resources they need in this tumultuous time.

"The acquisitions we executed in 2019 already are serving us well in weathering this economic crisis – helping us to capture more political and retransmission revenue as well as the benefits of geographic diversification. We entered this crisis delivering strong financial results, and we will persevere through it, bolstered by bigger audiences and higher brand awareness. On the other side of these challenges, we expect to benefit from the increased viewer loyalty and the business opportunity it will bring."

For earnings history and earnings-related data on E.W. Scripps Co. (SSP) click here.



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Corporate News, Earnings, Management Comments

Related Entities

Earnings