KNOXVILLE, Tenn. (AP) ? Scripps Networks Interactive Inc., operator of pay TV channels such as Food Network and HGTV, said Thursday that its net income fell 3 percent in the third quarter, as revenue grew but programming and marketing costs climbed faster because of the launch of new shows.
The earnings beat analyst expectations but its revenue fell short.
Shares fell $1.18, or 2.8 percent, to $40.66 in midday trading Thursday.
Net income in the three months to Sept. 30 came to $98.6 million, or 61 cents per share, compared with $102 million, or 61 cents per share, a year ago.
Excluding one-time adjustments, earnings came to 66 cents per share, beating the 65 cents per share expected by analysts polled by FactSet.
Revenue grew 8 percent to $504 million, less than the $511 million analysts were looking for.
The growth in revenue was driven by a 9 percent gain in ad revenue to $344 million, and a 6 percent gain in the fees it receives from pay TV distributors to $148 million. The rate of ad growth was slower than the 13 percent it reported in the second quarter.
Expenses were up $285 million, or 14 percent. That included a 25 percent increase in programming costs and 33 percent increase in marketing costs because of new shows.
The company reiterated its guidance for revenue at its lifestyle networks ? comprised of HGTV, Food Network, Travel Channel, DIY Network, Cooking Channel and Great American Country ? to grow 10 percent to 12 percent for the full year. The company expects programming expenses to rise 6 percent to 9 percent, while non-programming expenses should be flat or drop up to 2 percent.