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TEGNA’s (TGNA - Free Report) second-quarter 2022 non-GAAP earnings of 60 cents per share beat the Zacks Consensus Estimate by 7.14% and increased 20% on a year-over-year basis.
Revenues increased 7.1% year over year to $784.9 million but missed the consensus mark by 0.8%. The year-over-year growth can be attributed to an increase in political and subscription revenues, despite a volatile macroeconomic environment.
Notably, in February, Tegna entered into a definitive agreement to be acquired by an affiliate of Standard General for $24 per share in cash and become a private company.
The transaction, which was unanimously approved by the Tegna Board, has an equity value of around $5.4 billion and an enterprise value of $8.6 billion, including the assumption of debt.
With the acquisition in place, Tegna will become the United States’ largest minority-owned broadcast group.
The acquisition is currently on track and is expected to be completed in the second half of 2022, subject to closing conditions.
Subscription (49.6% of revenues) revenues increased 3.7% year over year to $389.1 million due to rate increases, partially offset by subscriber declines.
Advertising and Marketing services (42.7% of revenues) revenues decreased 1.7% year over year to $335.3 million due to softness in certain advertising categories, primarily auto, which continues to be impacted by supply chain disruptions.
Political (6.5% of revenues) revenues were $50.9 million, up 430.8% year over year
Other revenues (1.2% of revenues) were $9.7 million, up 31.6% year over year.
Non-GAAP adjusted EBITDA increased 12.3% year over year to $255.7 million. Adjusted EBITDA margin expanded 150 basis points (bps) from the year-ago period to 32.6%.
Non-GAAP operating expenses (71.3% of revenues) of $559.8 million were up 4.3% year over year, predominantly driven by investments in growth initiatives such as Premion and programming costs.
Non-GAAP operating income increased 14.8% year over year to $225.1 million. The operating margin expanded 190 bps from the year-ago period to 28.7%.
Balance Sheet & Cash Flow
As of Jun 30, 2022, total cash was $201 million compared with $43 million as of Mar 31, 2022.
Total debt was $3.1 billion and net leverage was 2.70 times as of Jun 30, 2021.
Free cash flow in the second quarter was $162 million compared with $182 million reported in the previous quarter. The uptick can be attributed to growth in political revenues.
DouYu International is down 55.7% in the year-to-date period compared with the Zacks Gaming industry’s decline of 31.8% and the Consumer Discretionary sector’s fall of 30.1%.
Enthusiast Gaming shares are down 34% in the year-to-date period compared with the Zacks Gaming industry’s decline of 31.8% and the Consumer Discretionary sector’s fall of 30.1%.
Genasys shares are down 13.2% in the year-to-date period compared with the Zacks Consumer Services - Miscellaneous industry’s decline of 10.8% and the Consumer Discretionary sector’s fall of 30.1%.
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TEGNA (TGNA) Q2 Earnings Beat Estimates, Revenues Rise Y/Y
TEGNA’s (TGNA - Free Report) second-quarter 2022 non-GAAP earnings of 60 cents per share beat the Zacks Consensus Estimate by 7.14% and increased 20% on a year-over-year basis.
Revenues increased 7.1% year over year to $784.9 million but missed the consensus mark by 0.8%. The year-over-year growth can be attributed to an increase in political and subscription revenues, despite a volatile macroeconomic environment.
Notably, in February, Tegna entered into a definitive agreement to be acquired by an affiliate of Standard General for $24 per share in cash and become a private company.
The transaction, which was unanimously approved by the Tegna Board, has an equity value of around $5.4 billion and an enterprise value of $8.6 billion, including the assumption of debt.
With the acquisition in place, Tegna will become the United States’ largest minority-owned broadcast group.
The acquisition is currently on track and is expected to be completed in the second half of 2022, subject to closing conditions.
TEGNA Inc. Price, Consensus and EPS Surprise
TEGNA Inc. price-consensus-eps-surprise-chart | TEGNA Inc. Quote
Quarter in Detail
Subscription (49.6% of revenues) revenues increased 3.7% year over year to $389.1 million due to rate increases, partially offset by subscriber declines.
Advertising and Marketing services (42.7% of revenues) revenues decreased 1.7% year over year to $335.3 million due to softness in certain advertising categories, primarily auto, which continues to be impacted by supply chain disruptions.
Political (6.5% of revenues) revenues were $50.9 million, up 430.8% year over year
Other revenues (1.2% of revenues) were $9.7 million, up 31.6% year over year.
Non-GAAP adjusted EBITDA increased 12.3% year over year to $255.7 million. Adjusted EBITDA margin expanded 150 basis points (bps) from the year-ago period to 32.6%.
Non-GAAP operating expenses (71.3% of revenues) of $559.8 million were up 4.3% year over year, predominantly driven by investments in growth initiatives such as Premion and programming costs.
Non-GAAP operating income increased 14.8% year over year to $225.1 million. The operating margin expanded 190 bps from the year-ago period to 28.7%.
Balance Sheet & Cash Flow
As of Jun 30, 2022, total cash was $201 million compared with $43 million as of Mar 31, 2022.
Total debt was $3.1 billion and net leverage was 2.70 times as of Jun 30, 2021.
Free cash flow in the second quarter was $162 million compared with $182 million reported in the previous quarter. The uptick can be attributed to growth in political revenues.
Zacks Rank & Stocks to Consider
TEGNA currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Zacks Consumer Discretionary sector are DouYu International (DOYU - Free Report) , Enthusiast Gaming and Genasys (GNSS - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
DouYu International is down 55.7% in the year-to-date period compared with the Zacks Gaming industry’s decline of 31.8% and the Consumer Discretionary sector’s fall of 30.1%.
Enthusiast Gaming shares are down 34% in the year-to-date period compared with the Zacks Gaming industry’s decline of 31.8% and the Consumer Discretionary sector’s fall of 30.1%.
Genasys shares are down 13.2% in the year-to-date period compared with the Zacks Consumer Services - Miscellaneous industry’s decline of 10.8% and the Consumer Discretionary sector’s fall of 30.1%.