A blowout ratings performance by the HGTV network helped Scripps Networks (NASDAQ:SNI) post first-quarter sales and profit growth. The media giant, which also controls the popular Food Network and Travel Channel brands, today announced Q1 results that were behind Wall Street sales estimates, but ahead of profit projections.
Here's a look at how the headline numbers stacked up against the pros' models:
|Revenue||$661 million||$658 million|
|Profit||$0.92 per share||$0.94 per share|
Revenue was up 2.3% and net income was up 7.9%.
Flat ad revenue
Advertising revenue was flat across Scripps' portfolio of TV channels. In a press release, management explained that "softness" in the ad industry, combined with lower ratings on a few channels, helped keep a lid on overall growth.
However, there were several standout performers in the group. The DIY Network, for example, posted 9% higher revenue. And HGTV, the company's biggest property by far, turned in the best showing. Sales rose 4% on the back of a 14% year-over-year ratings boost. Scripps executives called it the most successful three months in the channel's 20 year history.
A few channels struggled to hold on to their audiences, though. The Travel Channel, Scripps' third biggest property behind HGTV and Food Network, had a rough first quarter. Revenue fell 5%, continuing a slump that ran through all of 2014. And Food Network's sales ticked lower by 1%.
Investing in growth
Profit came in above expectations despite a few new expenses. Scripps had to shell out $10 million as part of its acquisition of Polish media company TVN. That helped drive an 8% jump in expenses, but the company sees the expansion opportunity as well worth the investment. "Upscale consumers have built deep and enduring relationships with our brands both in the United States and, increasingly, in international markets," said CEO Kenneth Lowe in a press release accompanying the results.
Executives are aiming to keep the momentum going at HGTV. And we have some data to suggest they're succeeding. HGTV logged its best-ever April ratings last month on the back of hit shows like Fixer Upper, Flip or Flop, and Lakefront Bargain Hunt. The channel attracted 43 million prime-time viewers last month and should contribute to better advertising results for the rest of the year. "The content in the HGTV programming pipeline is stronger than ever and we are well positioned to attract and grow our audience," the channel's general manager said in a recent press release.