TEGNA (TGNA) Q3 Earnings Beat Estimates, Revenues Fall Y/Y
TEGNA’s TGNA third-quarter 2023 non-GAAP earnings of 39 cents per share beat the Zacks Consensus Estimate by 14.71% but decreased 40% on a year-over-year basis.
Revenues decreased 11.2% year over year to $713.3 million and missed the Zacks Consensus Estimate by 0.25%. 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.
Since the termination of the merger agreement with Standard General in May, TEGNA has committed to more than $0.8 billion in share repurchases this year, through both ASR programs and the 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 (53% of revenues) revenues increased 0.1% year over year to $377.9 million, driven by contractual rate increases and partially offset by subscriber declines.
Advertising and Marketing services (43.8% of revenues) revenues decreased 2.6% year over year to $312.4 million due to continued macroeconomic headwinds. However, third-quarter 2023 advertising trends saw sequential improvement from the prior quarter.
Political (1.6% of revenues) revenues were $11.6 million, down from $92.9 million reported in the year-ago quarter.
Other revenues (1.6% of revenues) were $11.3 million, down 6.5% year over year.
Non-GAAP adjusted EBITDA decreased 37.6% year over year to $165.9 million. Adjusted EBITDA margin contracted 990 basis points (bps) from the year-ago period to 23.3%.
Non-GAAP operating expenses (80.7% of revenues) of $575.7 million were up 1.5% year over year. This increase was driven by programming costs, partially offset by operational expense management improvements.
Non-GAAP operating income decreased 41.7% year over year to $137.5 million. The operating margin contracted 1,010 bps from the year-ago period to 19.3%.
Balance Sheet & Cash Flow
As of Sep 30, 2023, total cash and cash equivalents were $553 million.
Total debt was $3 billion and net leverage was 2.61 times as of Sep 30, 2023.
Free cash flow in the third quarter was $60.1 million compared with $112 million reported in the previous quarter.
Zacks Rank & Other Stocks to Consider
TEGNA currently sports a Zacks Rank #1 (Strong Buy).
NetEase NTES, AST SpaceMobile ASTS and Genius Sports Limited GENI are some other top-ranked stocks that investors can consider in the broader sector. While NTES sports a Zacks Rank #1, ASTS and GENI 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 NetEase have gained 54% year to date. NTES is set to report its third-quarter 2023 results on Nov 16.
Shares of AST SpaceMobile have declined 17.6% year to date. ASTS is slated to report its third-quarter 2023 results on Nov 13.
Shares of Genius Sports Limited have gained 51.3% year to date. GENI is set to report its third-quarter 2023 results on Nov 13.
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