CINCINNATI -- E. W. Scripps Co. stock surged more than 6 percent to $22.67 Friday after the company tripled its profits on better than expected revenue in the fourth quarter.
Scripps earned a $36 million profit on revenue of $368 million in the three months ending Dec. 31. Earnings per share of $0.44 on continuing operations fell 13 cents short of analyst expectations. But revenue, which increased 41 percent from a year ago, was nearly $14 million better than analysts were forecasting.
“The company made tremendous strides in its plan to improve short-term operating performance while positioning itself strategically for long-term growth,” Scripps CEO Adam Symson said in a press release. “We completed the reorganization of our company into consumer-focused Local and National Media divisions, reduced our corporate and division costs by more than $30 million, sold our 34 radio stations, and beat our financial results guidance across the board each quarter.”
Broadcast and entertainment stocks are trading near an all-time highs, driven by the rapid growth of streaming platforms like Netflix and an expectation that the television industry will consolidate in a series of mergers and acquisitions.
Scripps acquired three stations in Florida and Texas from Raycom Media in a deal that closed Jan. 1. And it announced plans to acquire 12 stations from Cordilerra Communications in ten cities.
“Upon the closing of the Cordillera transaction, we will own No.1 stations in a third of our local media markets,” Symson said.
In a conference call with Wall Street analysts, Symson said the company continues to look for station acquisitions that could improve its position in markets where it already competes. But it may not be able to accomplish that goal by swapping stations with other companies.
"The regulatory environment is questionable right now with respect to swaps," he said. "Ultimately what we're looking at as our filter is how do we continue to enhance the strength and operating performance of our portfolio as well as the durability. So, I think second stations is definitely something we're interested in continuing to pursue."
Also during the earnings call, Scripps Local Media President Brian Lawlor elaborated on the company’s decision to cancel its "Pickler & Ben" talk show, effective in September.
“When both NBC and ABC decided to return to the daytime talk show business, both networks committed distribution of their shows on their owned and operated stations,” Lawlor said. “That locked us out of some of the nation's top markets. This led "Pickler & Ben" with no path for distribution growth into the largest U.S. cities, a path we've counted on to grow the show.”