We upgrade our recommendation for Scripps Networks Interactive (SNI) to Outperform following its impressive third quarter of fiscal 2010 financial results, well above the Zacks Consensus Estimates. This was primarily attributable to significant growth in advertising and affiliate-fee revenue at the company’s flagship Lifestyle Media business and higher total segment profit.
Importantly, the struggling online shopping business sites of the company also generated year-over-year growth. According to our view, both advertising revenue and affiliate fee revenue will remain healthy in the near-future due to an improving U.S. economy. Scripps Networks has successfully hiked fees it charges cable operators.
Acquisition of a majority stake in the Travel Channel and re-branding of FLN channel as Cooking Channel will help the company to maintain its future growth. Moreover, Scripps Networks is gradually diversifying in the emerging Asian markets.
SCRIPPS NETWRKS (SNI): Free Stock Analysis Report
Zacks Investment Research
