Scripps provides financial guidance for first half of 2011
Wed, December 08, 2010 by Tim King
The E.W. Scripps Company today will provide a broad outlook for the financial performance of its television stations and newspapers covering the final three months of 2010 and the first six months of 2011.
The commentary is part of prepared remarks at the UBS Global Media and Communications Conference, and can be heard live starting at 11 a.m. (Eastern) by visiting the investor relations page at www.scripps.com.
Fourth quarter 2010 guidance
With two-thirds of the fourth quarter completed, the company affirmed the guidance it gave on Nov. 2, 2010.
Scripps expects the year-over-year decline in newspaper revenue, which was down 6.8 percent in the third quarter, to continue to moderate in the fourth quarter. Newspaper expenses are expected to rise slightly, due largely to increases in newsprint prices.
Television ad revenue in the fourth quarter is expected to be 35 to 40 percent higher than in the fourth quarter of 2009, fueled by the surge in political advertising in October. Since November 2, when the political advertising ceased, the stations' core business of spot advertising has remained above its 2009 levels. November was stronger than December is pacing, but the company expects local and national advertising at the stations to be up in the low-double-digit range for the two-month period.
First half 2011 guidance
Scripps believes economic conditions that affect local media performance are evolving too quickly to give guidance for the full year 2011, but the company gave a preliminary outlook for the company's performance in the first half of the year.
Despite tougher comparisons due to the rebound in local television advertising that started in December 2009, Scripps believes year-over-year television ad revenues will increase in the low- to mid-single-digit range, excluding political advertising. Expenses are likely to increase in the mid-single digits over the first six months, led by higher employee costs as the company reinstates certain benefits.
"Several key advertising categories at our television stations are returning to 2008 levels," said Rich Boehne, president and chief executive officer. "Scripps is fortunate that our financial flexibility allows us to focus during this period on improving the news product for our audiences and enhancing the marketplaces we create for our advertisers."
The company believes trends in newspaper advertising revenues will continue through at least the first half of 2011, with year-over-year declines continuing to moderate. Expenses will rise in the mid-single-digit range, driven by higher newsprint prices and increased expenses for employee benefits.
"The trends in newspaper advertising are slightly more encouraging," Boehne said. "Some of our classified advertising categories - such as help wanted and automotive - have shown real strength as 2010 ends. A strengthening economy will boost the other revenue streams of our newspapers, and the efforts to rationalize our operations through the Scripps 3.0 initiative have us well positioned to capitalize on revenue trends as the broader economy improves."
Full-year guidance on non-operating items
Scripps expects restructuring charges of up to $12 million in 2011 for the continuing reorganization of the newspaper division.
Depreciation and amortization is expected to be between $40 million and $45 million.
Capital expenditures should be between $15 million and $20 million.
Corporate and shared expenses are expected to remain approximately $8 million per quarter.
This press release contains certain forward-looking statements related to the company's businesses that are based on management's current expectations. Forward-looking statements are subject to certain risks, trends and uncertainties, including changes in advertising demand and other economic conditions that could cause actual results to differ materially from the expectations expressed in forward-looking statements. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. The company's written policy on forward-looking statements can be found on page 11 of its 2009 SEC Form 10K. We undertake no obligation to publicly update any forward-looking statements to reflect events or circumstances after the date the statement is made.
About ScrippsThe E.W. Scripps Company (http://www.scripps.com/) is a diverse, 132-year-old media enterprise with interests in television stations, newspapers, local news and information Web sites, and the syndication of news features and comics.