Scripps Networks Interactive Inc. (NYSE: SNI), the parent of HGTV and Food Network, was a bright spot in an otherwise gloomy media universe when it reported a surprising good quarter earlier this week.

Net income at the Knoxville, Tenn.-based company was $124.6 million, or $0.96 per share, versus $131.3 million in the prior year. Adjusted profit was $1.06, topping consensus forecasts of $0.98. Revenue surged 20% thanks to double-digit gains at the Cooking Channel and the DIY Network. Advertising revenue surged 22% to $527.9 million in the third quarter, thanks to solid performance across all of its businesses. Affiliate fees paid by program distributors jumped 13% to $224.9 million.

If Chief Executive Officer Kenneth Lowe is worried about cord-cutters and declining viewership, he sure did a good job of hiding it during the company’s earnings conference call earlier this week. He noted that unlike its rivals, Scripps owns the rights to almost all of its content, enabling it effectively monetize it no matter how consumers access it. The company also attracts a well-heeled audience that advertisers covet.

HGTV’s hit “Love It or List It,” for instance, added 2 million viewers with a median household income of $92,000, well above the U.S. average of $51,939. Its flagship channels, Food Network and HGTV, finished in the top 10 networks on 36 nights during the quarter. The company also was the only network to post viewership gains among milennials, a demographic that’s coveted by advertisers who think their brand loyalties can be influenced more easily than older consumers. Advertisers also like Scripps because most of its programs are watched live in this age endless viewing options.

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Though cord cutting does pose an existential threat to the cable ecosystem, it is a slow-moving one because people can’t duplicate their pay-television service online. However, it is noteworthy that Dish Network Corp. (NASDAQ: DISH) has included the Food Network and HGTV in its $20 per month Sling TV service, a so-called skinny bundle aimed at milennials. People are willing to pay for content they value, and viewers certainly value the offerings of Scripps Networks.

Shares of the company have plunged more than 22% since January, indicating that investors have painted the company with the same brush as the rest of the media world. The average 52-week price target on the stock is $63.63, about 10% higher than where it currently trades. Investors may want to consider adding it to their portfolios.

By Jonathan Berr

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