Updated below: Thanks to ad revenue from its TV and interactive holdings, Scripps (NYSE: SSP) reported positive 4Q earnings.  Revenue for Scripps during the quarter grew 11 percent year-over-year to $683 million. Operating income was up 18 percent to $214 million during the three-month period. Other news from its 4Q report included:
-- Total revenue for the Scripps Networks division – which includes channels such as HGTV, DIY, Food Network and others—increased 13 percent to $280 million. Advertising revenue at Scripps Networks was up 11 percent to $224 million.
-- Interactive media revenue, largely fueled by sites like Shopzilla and uSwitch, was $86.6 million for Q406 compared with $63.2 million in Q405. The segment had operating profit of $28.3 million. But Scripps expects it to generate segment profit of only about $9 million in the first quarter.
-- Revenue at newspapers managed solely by Scripps was down 1.0 percent during Q406 to $182 million.
-- Online newspaper ad revenue was up 28 percent, year-over-year.
Updated: From the conference call: Scripps has “no plan to sell, spin off or separate the newspaper division,” president and CEO Kenneth Lowe said on the call...this comes after some hints to the contrary at an investor conference earlier this month.
AP: Morgan Stanley’s estimate for operating profit in Scripps’ interactive media in the first quarter was $23.7 million, and Merrill Lynch analyst Lauren Rich Fine was looking for $17 million. “The stock is likely to trade down on the news in large part because of concerns about Shopzilla,” Lisa Monaco, a Morgan Stanley Research analyst, wrote in a report to investors. She also noted that unique visitors at Shopzilla were down on a year-to-year basis.
Joseph NeCastro, Scripps’ CFO, said there has been increased spending on marketing to support the rollout of new products at uSwitch and that Shopzilla’s focus on improving customer experience will result in higher labor costs.
Reuters: Lauren Fine on Scripps: “While we like Scripps’ strategy of investing for the long term, this style might not fit with the Internet as technology changes too quickly to take a longer-term stance, and maximizing short-term profits might be more important to recoup their investment,” she said.
Earnings release | Webcast