Why E.W. Scripps Shares Sank

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of newspaper and television company E.W. Scripps (NYSE: SSP  ) sank as low as 14% today after its quarterly results and guidance disappointed Wall Street.

So what: The stock has risen sharply in 2013 on signs of a rebound in earnings, but today's second-quarter results -- profit fell 41% on a 4.2% decline in revenue -- coupled with downbeat guidance for the full year is forcing analysts to scale back their expectations a bit. On a positive note, E.W.'s digital revenue climbed a solid 14% during the quarter, suggesting that management is battling the broad decline in print advertising quite well.

Now what: For full-year 2013, management expects television revenue to be down to the low teens due to the political off-year, and newspaper revenue and expenses to fall at a low-single-digit rate, with the decline in expenses to be greater than the revenue decline. "Across the country this summer, we're rolling out the next generation of news apps and Internet news brands, designed to set our brands apart for engagement with fast-growing audiences through high-quality enterprise reporting and multi-platform story telling," said Chairman and CEO Rich Boehne. "These new digital news products are being accompanied by an expanded advertising sales force dedicated to garnering more than our share of this evolving marketplace." Given the strong secular headwinds that still face E.W. Scripps, however, I'd continue to be cautious about buying into that bullishness.

The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2578966, ~/Articles/ArticleHandler.aspx, 10/1/2016 5:18:54 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 20 hours ago Sponsored by:
DOW 18,308.15 164.70 0.91%
S&P 500 2,168.27 17.14 0.80%
NASD 5,312.00 42.85 0.81%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2016 4:02 PM
SSP $15.90 Up +0.34 +2.19%
The E.W. Scripps C… CAPS Rating: **