E.W. Scripps (NASDAQ:SSP) Posts Q3 Sales In Line With Estimates

Core Advertising Revenue - Local Media division core advertising revenue increased by 2% in Q3, driven by services category and national advertising growth due to strong sales execution and Scripps' sports strategy [1] - The company anticipates strong core revenue growth in Q4, supported by a new agreement with the NHL's Tampa Bay Lightning and growth in live sports markets [1] Financial Performance - E.W. Scripps reported a revenue decline of 18.6% year-on-year to $525.9 million in Q3, meeting Wall Street's expectations [2][6] - Free Cash Flow was -$15.07 million, down from $127.4 million in the same quarter last year [2] - Operating margin decreased to 7.2%, down from 18.8% in the same quarter last year [2][9] Revenue Growth and Projections - Over the last five years, E.W. Scripps experienced a sluggish sales growth rate of 6.5% compounded annually, which is below the standard for the consumer discretionary sector [4] - Analysts project a further revenue decline of 1.5% over the next 12 months, indicating a lack of excitement regarding the company's newer products and services [6] Cost Management and Profitability - The Scripps Networks division achieved a 27% margin, aided by a 7% reduction in expenses [1] - Despite a higher efficiency reflected in the operating margin averaging 7.5% over the last two years, the company still faces challenges with profitability [8] Strategic Moves - Scripps announced the sale of two network-affiliated stations for total proceeds of $123 million, aligning with its strategy to optimize its portfolio and improve local station performance [1] - The company successfully closed on the placement of $750 million in new senior secured second-lien notes, which were used to pay off existing debt [1]