Flipping the Scripps: More Bad 1Q Results

Filling out the portrait of an industry in decline, E.W. Scripps Company announced Wednesday that its first-quarter earnings sank about 9%, compared to the same period in 2006, to $68.5 million. It also issued a gloomy forecast for the second quarter. The company expects total newspaper revenue to fall 4-6% in the current quarter, largely due to sinking classified and local ad revenues.

The most ominous news, however, concerns its interactive media division, including the Shopzilla and uSwitch online price comparison sites.

Based on first-quarter results and second-quarter projections, full-year profit from the interactive properties is expected to fall in the range of $30-$40 million--just half of the $60-$70-million range previously forecast by the company.

As shopping comparison sites, Shopzilla and uSwitch are somewhat unusual in the field of newspapers' online operations, but the drop-off seems to mirror the broader slowdown in newspapers' Web revenues. NYTCO, Tribune, Gannett and McClatchy all announced results showing online revenue growing at a lower rate than 2006, with percentage growth dropping by as much as half.

In a note to investors, Morgan Stanley analyst Lisa Monaco observed of Scripps specifically: "It looks like quite a meltdown in the interactive segments."



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