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TEGNA’s TGNA first-quarter 2021 non-GAAP earnings of 52 cents per share came in line with the Zacks Consensus Estimate. The bottom line increased 20.9% on a year-over-year basis.
Revenues increased 6.3% year over year to $727.1 million and beat the consensus mark by 0.01%. This year-over-year growth was driven by continued growth in subscription revenues and record first-quarter advertising and marketing services revenues.
TEGNA Inc. Price, Consensus and EPS Surprise
TEGNA Inc. price-consensus-eps-surprise-chart | TEGNA Inc. Quote
Quarter in Detail
Advertising and Marketing services (44.4% of revenues) revenues increased 9.4% year over year to $322.8 million. Revenues of Premion, TEGNA’s OTT advertising business, were up over 50% year over year.
Subscription (53.2% of revenues) revenues increased 16.2% year over year to $386.7 million due to rate increases, partially offset by subscriber declines.
Political (1.3% of revenues) revenues were $9.4 million, down 80.1% year over year
Other revenues (1.1% of revenues) were $8.1 million, down 9% year over year.
Non-GAAP adjusted EBITDA increased 8.7% year over year to $230.8 million. Adjusted EBITDA margin expanded 70 basis points (bps) to 31.7%. Adjusted EBITDA growth reflects strong operational performance of TEGNA’s stations including ongoing cost efficiency efforts, in addition to continued growth in subscription revenues and strong AMS revenues.
Non-GAAP operating expenses (72.6% of revenues) of $527.9 million were up 4.6% year over year, primarily on account of higher programming expenses in relation to an increase in subscription revenues.
Non-GAAP operating income increased 11.1% year over year to $199.1 million. Operating margin expanded 120 bps to 27.4%.
Balance Sheet & Cash Flow
As of Mar 31, 2021, total cash was $13 million compared with $41 million as of Dec 31, 2020.
Total debt was $3.5 billion and net leverage was 3.82 times as of Mar 31, 2021.
Free cash flow in the first quarter was $158.7 million, up 11.6% year over year.
For the second quarter of 2021, TEGNA expects GAAP revenues to be more than mid-to-high twenties percent. Non-GAAP operating expenses are expected to increase in low-double digits percent.
For 2021, TEGNA expects net subscription profits to grow in the mid-to-high teens percentage range.
The company expects free cash flow as a percentage of 2020-2021 revenues of 21%- 22%.
Zacks Rank & Other Stocks to Consider
TEGNA currently has a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader consumer & discretionary sector include Gray Television, Inc. GTN, Rogers Communication, Inc. RCI and WW International, Inc. WW, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Long-term earnings growth rate for Rogers Communications, Gray Television and WW International is currently pegged at 7.5%, 10%, and 15%, respectively.
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