Blog Post

Earnings: EW Scripps Swings To Loss; Cuts 400 Jobs; Online Newspaper Revs Fall 12 Percent

With the first quarter that has EW Scripps (NYSE: SSP) reporting as a separate company from Scripps Interactive (NYSE: SNI), the newspaper/broadcaster said it will suspend its dividend payment to give it more flexibility as economic conditions worsen. The company also said about 400 newspaper jobs will be cut in restructuring due to be completed in Q4. As for Q3 results, EW Scripps swung to a loss from continuing operations of $21.0 million ($0.39 per share) compared with income of $16.6 million ($0.31 per share). The loss was due largely to costs related to the separation of the Scripps Networks and interactive media businesses totaling $22 million, as well as a $24.9 million non-cash charge to further write down the investment in its Denver newspaper partnership. Weakness in advertising drove the Cincinnati company’s revenues down 9 percent to $230 million from $253 million the year before.

Newspapers’ online revs fall: Revs fell 17 percent to $131 million. Ad revenue was down 20 percent to $101 million. And in a rare but growing occurrence, online revenues dropped 12 percent to $9.1 million. The decline in web revs were attributed to print upsells in classifieds, a sales model that newspapers like McClatchy (NYSE: MNI) and Gannett (NYSE: GCI) have been working actively to move away from in hopes of growing online.

Staff reductions: Excluding the cuts announced today, Scripps says its newspaper workforce already has been reduced 13 percent since 2006. By the end of 2008, the employee count for newspapers will be under 4,000. Scripps estimates a $5 million related charge in Q4.

Release (PDF) | Webcast (10:00 AM EDT) | Transcript (via Seeking Alpha)