Donald Trump and Time Warner Cable helped E.W. Scripps Co. exceed analyst expectations in its fiscal first quarter, causing Scripps shares to post double-digit gains in early trading Friday.
The Cincinnati-based parent company of WCPO posted $4.9 million in net income on $209.5 million in revenue. That revenue figure was $2.5 million more than Wall Street analysts were forecasting. Scripps earnings per share result of 6 cents also beat forecasts.
Scripps shares increased more than 11 percent to $16.62 before Friday, settling back to a 9 percent gain in mid-morning trades on the New York Stock Exchange.
Scripps got a boost from a new contract with Time Warner Cable, which led to a near doubling of retransmission revenue to $53.6 million.
It was also aided by this year’s feisty presidential campaign, which generated a record $9.3 million from television ads in the three months ending March 31. Scripps has projected political revenue of $150 million this year, an estimate it re-affirmed in a conference call with analysts Friday.
“We know we’ll have an intense fight for the White House, accompanied by all the necessary spending,” said Brian Lawlor, senior vice president for television.
“We’ll complement this advertising in our newscasts with robust election coverage,” he added. “That coverage, combined with our unique Washington political sales strategy, reinforces Scripps as one of the best positioned to capture political ad dollars.”
Lawlor said Trump led all Republican candidates in spending at Scripps stations, which happen to be located in key battleground states like Ohio, Florida and Wisconsin.
“When it matters, he spends in the states where it has been critical for him to win,” Lawlor said. “When it was all said and done, he spent a good bit more than all the other candidates who were running on the Republican side. So, maybe that gives you all hope as he now is going more public about raising more money.”
Scripps television revenue jumped 11 percent in the first quarter, while radio revenue declined 4.5 percent to $14.6 million. Digital revenue increased 55 percent to $12.3 million, while operating losses in that unit declined 42 percent to $3.1 million.
Thanks to acquisitions of the podcasting company, Midroll Media, and the online humor platform, Cracked, Scripps now generates about 45 percent of its digital revenue from national offerings, up from 35 percent in prior quarters, said Senior Vice President Adam Symson.
The presidential race is also impacting digital revenue because campaigns are spending heavily on ads that run before video content from Scripps stations and Newsy, the millennial-focused video news service that Scripps acquired in 2013.
“There’s just an incredible amount of demand for video pre-roll,” Symson said. “We’re working to generate as much video as we can in our local markets and with Newsy because we see the buyers just standing by, looking to make buys in pre-roll advertising for political dollars.”