Food Fattens Scripps Results


E.W. Scripps Co.'s first-quarter results were pushed
further into the black by a surprising performance from Food Network, but the
Cincinnati-based newspaper and broadcasting conglomerate does not expect the gravy train
to last for long.

Scripps posted a 9.5 percent increase in operating cash
flow for the period, to $91.7 million, and its earnings per share were up 15 percent, to
40 cents.

Growth at its two cable networks -- Food and Home &
Garden Television -- was the main driver for the company's overall results. However,
the company cautioned that revenue was flat in the first quarter, and indications are that
second-quarter sales will be flat, as well.

"Scripps had a solid first quarter, driven by healthy
newspaper advertising and the continuing growth of our cable-television networks,"
Scripps CEO William Burleigh said in a prepared statement. "Operating cash flow grew
respectably, and core earnings per share were up 15-plus percent."

Although Burleigh said growth at the cable networks
"continues unabated" -- operating cash flow at HGTV more than doubled, and Food
had positive cash flow of $500,000 -- he doesn't expect it to last forever.

"We don't expect Food to remain cash-flow-positive for the full year,"
Burleigh said in the statement. "In the coming months, we'll be increasing our
investment in the network to improve programming and to further consolidate operations
under the Scripps Networks banner."

Rich Boehne, a spokesman for Scripps, said the
company's strategy from the beginning has been to invest more in original programming
for both of its cable networks.

"The key strategy with HGTV is that we put investment
in original programming," Boehne said. "It's the same strategy for Food.
But at the same time, we're telling investors to remember that we continue to invest
in programming. Don't expect profits [at Food] every quarter from here."

For the quarter, HGTV increased its cash flow to $4.3
million, compared with $1.8 million in the same period last year, while revenue at the
network grew 63 percent to $33.1 million.

HGTV also increased its domestic subscriber base to 51.9
million, up 11.7 million in the past 12 months.

At Food, revenue was up 58 percent to $13.9 million. Cash
flow improved to $500,000, compared with negative $2.4 million in the like period last
year. Subscribers at the network also increased by 7.4 million during the past 12 months,
to 39.1 million.