Programming Costs Up At Scripps Networks

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Scripps Networks Interactive reported lower net income in the third quarter because of higher expenses and special charges.

Net income declined 3% to $98.6 million from $101.7 million in the year-ago period. The company had a $25.3 million loss on foreign currency contracts.

Revenues rose 7.9% to $504 million. Affiliate fee revenues were up 6.1% to $148 million and advertising revenue was up 8.6% to $344 million.

Expenses rose 14% to $285 million. The company said the increase was driven by a 25% increase in programming costs resulting from the premiere of new shows and series. Marketing expenses rose 33% to support the launch of the new programming.

"The company's positive third-quarter results reflect the resiliency and popularity of our lifestyle television networks," said Ken owe, chairman, president and CEO, in a statement. "Food Network and HGTV each have a loyal and growing fan base that our advertising and distribution partners value. At Travel Channel, we're focused on defining the content category in new and creative ways, while our premium-tier networks -- Cooking Channel and DIY Network -- are benefitting from strong competitive positions as favored destinations for a highly desirable and defined group of media consumers. Our strategy to stay focused on these attractive content categories has resulted in consistent growth for the company and the creation of significant value for our shareholders."

The company reiterated its full-year guidance that revenue would be up 10% to 12%, that programming expenses would be up 6% to 9%.

Revenue at Food Network rose 12% to $180 million, while HGTV's advanced  4.1% to $181 million. At Travel Channel, revenue edged up 0.4% to $62.6 million, as DIY Network improved 3.7% to $23.7 million. Cooking Channel, now in its second year after replacing Fine Living, heated up a 36% revenue gain to $16.6 million.

Revenue at Great American Country dropped 21% to $6.1 million.