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TEGNA (TGNA) Q4 Earnings Miss Estimates, Revenues Fall Y/Y
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TEGNA’s (TGNA - Free Report) fourth-quarter 2023 non-GAAP earnings of 43 cents per share missed the Zacks Consensus Estimate by 8.51% and decreased 56.1% on a year-over-year basis.
Revenues declined 20.9% year over year to $725.9 million and missed the Zacks Consensus Estimate by 3.7%. The year-over-year decline was due to the reduction of political revenues from the mid-term election cycle last year and a fall in Advertising and Marketing Services revenues.
In December 2023, TEGNA’s board of directors authorized a new share repurchase program for up to $650 million of its common stock. This new share repurchase program will expire on Dec 31, 2025.
Subscription revenues (46.7% of total revenues) decreased 8.9% year over year to $339.3 million due to contractual rate increases, partially offset by a fall in subscribers.
Advertising and Marketing Services revenues (48.5% of total revenues) dipped 0.3% year over year to $351.9 million due to continued macroeconomic headwinds. However, fourth-quarter 2023 advertising trends saw sequential improvement from the prior quarter.
Political revenues (3.2% of total revenues) were $22.9 million, down from $179.4 million reported in the year-ago quarter.
Other revenues (1.6% of total revenues) were $11.8 million, down 5.8% year over year.
Non-GAAP adjusted EBITDA plunged 50.9% year over year to $177.1 million. Adjusted EBITDA margin contracted 1,490 basis points (bps) from the year-ago period to 24.4%.
Non-GAAP operating expenses (80.2% of total revenues) of $582.1 million were down 1.2% year over year. This decrease was due to lower variable cost of sales for digital revenues and a rise in operating expenses.
Non-GAAP operating income declined 54.9% year over year to $149.2 million. The operating margin contracted 1,550 bps from the year-ago period to 20.6%.
Balance Sheet & Cash Flow
As of Dec 31, 2023, total cash and cash equivalents were $361 million.
Total debt was $2.73 billion and net leverage was 2.8 times as of Dec 31, 2023.
Free cash flow in the fourth quarter was $130 million compared with $60.1 million reported in the previous quarter.
Outlook
For the first quarter of 2024, Tegna expects total GAAP revenues to decline in the low-to-mid single digits.
Non-GAAP operating expenses are estimated to grow in the low-single digits.
For 2024, TGNA expects the net leverage ratio to be below 3x. The company expects 2024/2025 two-year FCF between $900 million and 1.1 billion.
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TEGNA (TGNA) Q4 Earnings Miss Estimates, Revenues Fall Y/Y
TEGNA’s (TGNA - Free Report) fourth-quarter 2023 non-GAAP earnings of 43 cents per share missed the Zacks Consensus Estimate by 8.51% and decreased 56.1% on a year-over-year basis.
Revenues declined 20.9% year over year to $725.9 million and missed the Zacks Consensus Estimate by 3.7%. The year-over-year decline was due to the reduction of political revenues from the mid-term election cycle last year and a fall in Advertising and Marketing Services revenues.
In December 2023, TEGNA’s board of directors authorized a new share repurchase program for up to $650 million of its common stock. This new share repurchase program will expire on Dec 31, 2025.
TEGNA Inc. Price, Consensus and EPS Surprise
TEGNA Inc. price-consensus-eps-surprise-chart | TEGNA Inc. Quote
Quarter in Details
Subscription revenues (46.7% of total revenues) decreased 8.9% year over year to $339.3 million due to contractual rate increases, partially offset by a fall in subscribers.
Advertising and Marketing Services revenues (48.5% of total revenues) dipped 0.3% year over year to $351.9 million due to continued macroeconomic headwinds. However, fourth-quarter 2023 advertising trends saw sequential improvement from the prior quarter.
Political revenues (3.2% of total revenues) were $22.9 million, down from $179.4 million reported in the year-ago quarter.
Other revenues (1.6% of total revenues) were $11.8 million, down 5.8% year over year.
Non-GAAP adjusted EBITDA plunged 50.9% year over year to $177.1 million. Adjusted EBITDA margin contracted 1,490 basis points (bps) from the year-ago period to 24.4%.
Non-GAAP operating expenses (80.2% of total revenues) of $582.1 million were down 1.2% year over year. This decrease was due to lower variable cost of sales for digital revenues and a rise in operating expenses.
Non-GAAP operating income declined 54.9% year over year to $149.2 million. The operating margin contracted 1,550 bps from the year-ago period to 20.6%.
Balance Sheet & Cash Flow
As of Dec 31, 2023, total cash and cash equivalents were $361 million.
Total debt was $2.73 billion and net leverage was 2.8 times as of Dec 31, 2023.
Free cash flow in the fourth quarter was $130 million compared with $60.1 million reported in the previous quarter.
Outlook
For the first quarter of 2024, Tegna expects total GAAP revenues to decline in the low-to-mid single digits.
Non-GAAP operating expenses are estimated to grow in the low-single digits.
For 2024, TGNA expects the net leverage ratio to be below 3x. The company expects 2024/2025 two-year FCF between $900 million and 1.1 billion.
Zacks Rank & Key Picks
TEGNA carries a Zacks Rank #4 (Sell) at present.
Crowdstrike (CRWD - Free Report) , SEMrush (SEMR - Free Report) and Adobe (ADBE - Free Report) are some better-ranked stocks that investors can consider in the broader sector.
CRWD sports a Zacks Rank #1 (Strong Buy), while SEMR and ADBE carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Crowdstrike have returned 24% year to date. CRWD is scheduled to release fourth-quarter and fiscal 2024 results on Mar 5.
Shares of SEMrush have lost 8.3% year to date. SEMR is set to report its first-quarter 2024 results on Mar 4.
Shares of Adobe have lost 5.7% year to date. ADBE is set to release its first-quarter 2024 results on Mar 13.