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TEGNA (TGNA) Q2 Earnings Beat Estimates, Revenues Fall Y/Y
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TEGNA’s (TGNA - Free Report) second-quarter 2023 non-GAAP earnings of 44 cents per share beat the Zacks Consensus Estimate by 4.76% but decreased 26.7% on a year-over-year basis.
Revenues decreased 6.8% year over year to $731.5 million and missed the Zacks Consensus Estimate by 0.88%. The year-over-year decline was due to the reduction of political revenues from the mid-term election cycle last year and a decline in Advertising and Marketing Services (AMS) revenues.
Since the termination of the merger agreement with Standard General in May, TEGNA has committed to more than $0.75 billion in share repurchases this year, through both ASR programs and settlement of the merger termination fee in shares.
Subscription (54.2% of revenues) revenues increased 1.8% year over year to $396.1 million, driven by contractual rate increases and partially offset by subscriber declines.
Advertising and Marketing services (43.4% of revenues) revenues decreased 5.2% year over year to $317.7 million due to slowing down of underlying advertising trends by low-single digit percent year over year, adjusting for the loss of a single national Premion account. Automotive advertising revenues continued to show strong year-over-year growth for the fourth consecutive quarter.
Political (0.8% of revenues) revenues were $6 million, down from $50.9 million reported in the year-ago quarter.
Other revenues (1.6% of revenues) were $11.7 million, up 20.4% year over year.
Non-GAAP adjusted EBITDA decreased 24% year over year to $194.3 million. Adjusted EBITDA margin contracted 600 basis points (bps) from the year-ago period to 26.6%.
Non-GAAP operating expenses (77.3% of revenues) of $565.5 million were up 1% year over year. This increase was driven by programming costs, partially offset by operational expense management improvements.
Non-GAAP operating income decreased 26.2% year over year to $166 million. The operating margin contracted 600 bps from the year-ago period to 22.7%.
Balance Sheet & Cash Flow
As of Jun 30, 2023, total cash and cash equivalents were $489 million.
Total debt was $3.1 billion and net leverage was 2.57 times as of Jun 30, 2023.
Free cash flow in the first quarter was $112 million, compared with $133 million reported in the previous quarter.
LiveOne, DouYu International and On Holding are scheduled to report quarterly results on Aug 10, Aug 14 and Aug 15, respectively.
The Zacks Consensus Estimate for LVO’s second-quarter 2023 earnings per share (EPS) is pegged at a loss of 2 cents per share, unchanged over the past 30 days.
The consensus estimate for DOYU’s second-quarter 2023 EPS is pegged at 2 cents per share, up by 4 cents per share over the past 30 days.
The Zacks Consensus Estimate for ONON’s second-quarter 2023 EPS is pegged at 13 cents, up 18.2% over the past 30 days.
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TEGNA (TGNA) Q2 Earnings Beat Estimates, Revenues Fall Y/Y
TEGNA’s (TGNA - Free Report) second-quarter 2023 non-GAAP earnings of 44 cents per share beat the Zacks Consensus Estimate by 4.76% but decreased 26.7% on a year-over-year basis.
Revenues decreased 6.8% year over year to $731.5 million and missed the Zacks Consensus Estimate by 0.88%. The year-over-year decline was due to the reduction of political revenues from the mid-term election cycle last year and a decline in Advertising and Marketing Services (AMS) revenues.
Since the termination of the merger agreement with Standard General in May, TEGNA has committed to more than $0.75 billion in share repurchases this year, through both ASR programs and settlement of the merger termination fee in shares.
TEGNA Inc. Price, Consensus and EPS Surprise
TEGNA Inc. price-consensus-eps-surprise-chart | TEGNA Inc. Quote
Quarter in Details
Subscription (54.2% of revenues) revenues increased 1.8% year over year to $396.1 million, driven by contractual rate increases and partially offset by subscriber declines.
Advertising and Marketing services (43.4% of revenues) revenues decreased 5.2% year over year to $317.7 million due to slowing down of underlying advertising trends by low-single digit percent year over year, adjusting for the loss of a single national Premion account. Automotive advertising revenues continued to show strong year-over-year growth for the fourth consecutive quarter.
Political (0.8% of revenues) revenues were $6 million, down from $50.9 million reported in the year-ago quarter.
Other revenues (1.6% of revenues) were $11.7 million, up 20.4% year over year.
Non-GAAP adjusted EBITDA decreased 24% year over year to $194.3 million. Adjusted EBITDA margin contracted 600 basis points (bps) from the year-ago period to 26.6%.
Non-GAAP operating expenses (77.3% of revenues) of $565.5 million were up 1% year over year. This increase was driven by programming costs, partially offset by operational expense management improvements.
Non-GAAP operating income decreased 26.2% year over year to $166 million. The operating margin contracted 600 bps from the year-ago period to 22.7%.
Balance Sheet & Cash Flow
As of Jun 30, 2023, total cash and cash equivalents were $489 million.
Total debt was $3.1 billion and net leverage was 2.57 times as of Jun 30, 2023.
Free cash flow in the first quarter was $112 million, compared with $133 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 LiveOne (LVO - Free Report) , DouYu International (DOYU - Free Report) and On Holding (ONON - Free Report) . DouYu sports a Zacks Rank #1 (Strong Buy), while LiveOne and On Holding carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
LiveOne, DouYu International and On Holding are scheduled to report quarterly results on Aug 10, Aug 14 and Aug 15, respectively.
The Zacks Consensus Estimate for LVO’s second-quarter 2023 earnings per share (EPS) is pegged at a loss of 2 cents per share, unchanged over the past 30 days.
The consensus estimate for DOYU’s second-quarter 2023 EPS is pegged at 2 cents per share, up by 4 cents per share over the past 30 days.
The Zacks Consensus Estimate for ONON’s second-quarter 2023 EPS is pegged at 13 cents, up 18.2% over the past 30 days.