But a 2.5% decline in the cable programmer’s domestic affiliate revenue for the quarter still raised red flags at a time when investors remain jittery about the health of the MVPD marketplace and subscriber losses. SNI said the decline was offset by “annual rate increases and growth in emerging distribution platforms.”
SNI, with its high-profile lifestyle channels that include Food Network and Cooking Channel, is seen a prime acquisition target as M&A activity heats up in the media and entertainment arena, as evidenced by the $85.4 billion acquisition pact for that AT&T set last month for Time Warner.
Overall, SNI posted a 3.5% year-over-year gain in revenue to $803.1 million and a nearly 14% gain in adjusted net income to $163.9 million. SNI cited gains on foreign currency transactions and lower interest expense for also boosting earnings.
Advertising revenue at SNI core U.S. networks grew 6.6% to $477.5 million. Domestic distribution revenue dipped 2.5% to $194.3 million. SNI cited revenue and ratings gains at HGTV and Travel Channel as big drivers for the quarter, although it noted that higher programming costs and costs associated with premieres offset profit for the division.
HGTV again led the charge for SNI with a 7% revenue gain to $265.8 million. Food Network was up 1.5% to $217.4 million.
On the flip side, the loss at SNI international networks segmented widened significantly to $14.9 million, compared to $6 million in the year-ago quarter.
“Our successful strategy to focus on our differentiated lifestyle brands in the home, food and travel genres continues to pay off. Our popular networks are available on more platforms and reaching more new audiences than before, positioning the company for continued growth,” said Scripps Networks Interactive CEO Kenneth Lowe.