Scripps Networks Interactive Q4 Profit Falls - Quick Facts

(RTTNews) - Lifestyle media company Scripps Networks Interactive Inc. (SNI) reported that its fourth-quarter 2013 net income attributable to the company sharply declined to $108.52 million or $0.73 per share, from $305.80 million or $2.02 in the fourth quarter 2012.

In connection with its annual impairment test for goodwill, the company recorded a $24.7 million non-cash charge in the fourth quarter of 2013 to write-down the goodwill associated with our Travel Channel International business. The charge reduced 2013 net income attributable to SNI by $24.7 million, $0.17 per share.

In the fourth quarter of 2012, the firm recorded a $19.7 million non-cash charge to write-down the goodwill associated with RealGravity to fair value. Equity in earnings of affiliates for the fourth quarter of 2012 also reflects a non-cash charge of $5.9 million to reduce the carrying value of an investment to its estimated fair value. These charges decreased 2012 net income attributable to the company by $22.0 million, $0.15 per share.

The company said its tax provision in the fourth quarter of 2012 reflected an income tax benefit of $213 million arising from the reversal of valuation allowances on deferred tax assets related to capital loss carry forwards. Previously, the company had estimated that it would be unable to use any of the capital loss carry forwards generated from the sales of the Shopzilla and uSwitch businesses.

As a consequence of a restructuring that was completed to achieve a more efficient tax structure, the company recognized a $574 million capital gain that utilized substantially all of its capital loss carry forwards. As the capital losses are not available in states in which the company does not file unitary income tax returns, state tax expenses totaling $23.1 million were also recognized. These income tax adjustments increased net income attributable to the company by $190 million, $1.26 per share in 2012.

Operating revenues for the quarter increased 8.2 percent to $654.40 million from the prior-year's $604.67 million. Results for the three-month period ended December 31 reflect strong advertising revenue of $450 million, up 8.8 percent, and affiliate fee revenue of $190 million, up 9.7 percent year over year. A decrease in other revenue, due to a reduction in international licensing fees partially offset the company's total revenue growth.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.97 per share and revenues of $655.41 million for the quarter. Analysts' estimates typically exclude special items.

For 2014, total revenue is expected to increase between 6 percent and 8 percent. Noncontrolling share of net income is to be between $190 million and $200 million. Twenty one analysts estimate revenues of $2.72 billion for fiscal 2014.