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TEGNA (TGNA) Q1 Earnings Beat Estimates, Revenues Fall Y/Y
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TEGNA’s (TGNA - Free Report) first-quarter 2023 non-GAAP earnings of 47 cents per share beat the Zacks Consensus Estimate by 2.17% but decreased 22.03% on a year-over-year basis.
Revenues decreased 4% year over year to $740 million and missed the consensus mark by 0.76%. The year-over-year decline was due to cyclical even-year events, primarily driven by the absence of political revenues and Winter Olympics on NBC, the largest big four affiliate portfolio as well as the Super Bowl airing on NBC last year compared with Fox stations this year.
Notably, in February 2022, 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.
On Apr 21, 2023, the D.C. Court of Appeals denied the petition for a writ of mandamus. TEGNA is currently evaluating its options.
However, recently, the FCC put off consideration of the proposed purchase raising concerns that the transaction might trigger price increases for consumers as TV stations boost charges for cable providers. The deal might also reduce local content on TV stations.
Subscription (55.9% of revenues) revenues increased 5.8% year over year to $414.2 million, driven by contractual rate increases and partially offset by subscriber declines.
Advertising and Marketing services (41.5% of revenues) revenues decreased 13.2% year over year to $307.8 million due to the absence of the Winter Olympics and Super Bowl last year on our strong portfolio of NBC stations as well as continued macroeconomic headwinds. Automotive advertising revenues continued to show strong year-over-year growth for the third consecutive quarter adjusting for Winter Olympics and Super Bowl.
Political (0.7% of revenues) revenues were $5.3 million, down from $17.9 million reported in the year-ago quarter.
Other revenues (1.7% of revenues) were $12.9 million, up 28.6% year over year.
Non-GAAP adjusted EBITDA decreased 18% year over year to $205 million. Adjusted EBITDA margin contracted 450 basis points (bps) from the year-ago period to 27.7%.
Non-GAAP operating expenses (76.2% of revenues) of $564 million were up 2% year over year. This increase was driven by programming costs, partially offset by lower stock-based compensation expense.
Non-GAAP operating income decreased 19.6% year over year to $176 million. The operating margin contracted by 700 bps from the year-ago period to 23.7%.
Balance Sheet & Cash Flow
As of Mar 31, 2023, total cash and cash equivalents were $683 million.
Total debt was $3.1 billion and net leverage was 2.34 times as of Mar 31, 2023.
Free cash flow in the first quarter was $133 million compared with $297.1 million reported in the previous quarter.
Monro Muffler Brake and DouYu International are scheduled to report quarterly results on May 18. YETI is scheduled to report its quarterly report on May 11.
The Zacks Consensus Estimate for MNRO’s first-quarter 2023 earnings is pegged at 33 cents per share, unchanged over the past 30 days.
The Zacks Consensus Estimate for YETI’s first-quarter 2023 earnings is pegged at 15 cents per share, which increased by 1 cent per share over the past 30 days.
The Zacks Consensus Estimate for DOYU's first-quarter 2023 earnings is pegged at a loss of 1 cent per share, which increased by 1 cent per share over the past 30 days.
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TEGNA (TGNA) Q1 Earnings Beat Estimates, Revenues Fall Y/Y
TEGNA’s (TGNA - Free Report) first-quarter 2023 non-GAAP earnings of 47 cents per share beat the Zacks Consensus Estimate by 2.17% but decreased 22.03% on a year-over-year basis.
Revenues decreased 4% year over year to $740 million and missed the consensus mark by 0.76%. The year-over-year decline was due to cyclical even-year events, primarily driven by the absence of political revenues and Winter Olympics on NBC, the largest big four affiliate portfolio as well as the Super Bowl airing on NBC last year compared with Fox stations this year.
Notably, in February 2022, 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.
On Apr 21, 2023, the D.C. Court of Appeals denied the petition for a writ of mandamus. TEGNA is currently evaluating its options.
However, recently, the FCC put off consideration of the proposed purchase raising concerns that the transaction might trigger price increases for consumers as TV stations boost charges for cable providers. The deal might also reduce local content on TV stations.
TEGNA Inc. Price, Consensus and EPS Surprise
TEGNA Inc. price-consensus-eps-surprise-chart | TEGNA Inc. Quote
Quarter in Detail
Subscription (55.9% of revenues) revenues increased 5.8% year over year to $414.2 million, driven by contractual rate increases and partially offset by subscriber declines.
Advertising and Marketing services (41.5% of revenues) revenues decreased 13.2% year over year to $307.8 million due to the absence of the Winter Olympics and Super Bowl last year on our strong portfolio of NBC stations as well as continued macroeconomic headwinds. Automotive advertising revenues continued to show strong year-over-year growth for the third consecutive quarter adjusting for Winter Olympics and Super Bowl.
Political (0.7% of revenues) revenues were $5.3 million, down from $17.9 million reported in the year-ago quarter.
Other revenues (1.7% of revenues) were $12.9 million, up 28.6% year over year.
Non-GAAP adjusted EBITDA decreased 18% year over year to $205 million. Adjusted EBITDA margin contracted 450 basis points (bps) from the year-ago period to 27.7%.
Non-GAAP operating expenses (76.2% of revenues) of $564 million were up 2% year over year. This increase was driven by programming costs, partially offset by lower stock-based compensation expense.
Non-GAAP operating income decreased 19.6% year over year to $176 million. The operating margin contracted by 700 bps from the year-ago period to 23.7%.
Balance Sheet & Cash Flow
As of Mar 31, 2023, total cash and cash equivalents were $683 million.
Total debt was $3.1 billion and net leverage was 2.34 times as of Mar 31, 2023.
Free cash flow in the first quarter was $133 million compared with $297.1 million reported in the previous quarter.
Zacks Rank & Stocks to Consider
TEGNA currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Consumer Discretionary sector are Monro Muffler Brake (MNRO - Free Report) and YETI (YETI - Free Report) , carrying a Zacks Rank #2 (Buy) and DouYu International (DOYU - Free Report) , sporting Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks Rank #1 stocks here.
Monro Muffler Brake and DouYu International are scheduled to report quarterly results on May 18. YETI is scheduled to report its quarterly report on May 11.
The Zacks Consensus Estimate for MNRO’s first-quarter 2023 earnings is pegged at 33 cents per share, unchanged over the past 30 days.
The Zacks Consensus Estimate for YETI’s first-quarter 2023 earnings is pegged at 15 cents per share, which increased by 1 cent per share over the past 30 days.
The Zacks Consensus Estimate for DOYU's first-quarter 2023 earnings is pegged at a loss of 1 cent per share, which increased by 1 cent per share over the past 30 days.