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TEGNA (TGNA) Q3 Earnings Beat Estimates, Revenues Rise Y/Y

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TEGNA’s TGNA third-quarter 2021 non-GAAP earnings of 55 cents per share beat the Zacks Consensus Estimate by 12.24% but declined 6.8% on a year-over-year basis.

Revenues increased 2.5% year over year to $756.5 million and beat the consensus mark by 1.43%. This year-over-year growth was driven by record third-quarter growth in subscription revenues, and advertising and marketing services revenues.

Quarter in Detail

Advertising and Marketing services (48.1% of revenues) revenues increased 22% year over year to $364.2 million, driven by strong growth across advertising categories.

Subscription (48.7% of revenues) revenues increased 16.4% year over year to $368.7 million due to rate increases.

TEGNA Inc. Price, Consensus and EPS Surprise

TEGNA Inc. Price, Consensus and EPS Surprise
TEGNA Inc. Price, Consensus and EPS Surprise

TEGNA Inc. price-consensus-eps-surprise-chart | TEGNA Inc. Quote

Political (2% of revenues) revenues were $15 million, down 87.1% year over year

Other revenues (1.1% of revenues) were $8.6 million, up 29.6% year over year.

Non-GAAP adjusted EBITDA decreased 5.6% year over year to $244.4 million. Adjusted EBITDA margin contracted 280 basis points (bps) to 32.3%.

Non-GAAP operating expenses (72% of revenues) of $544.6 million were up 6.3% year over year.

Non-GAAP operating income declined 6.2% year over year to $211.9 million. Operating margin contracted 260 bps on a year-over-year basis to 28%.

Balance Sheet & Cash Flow

As of Sep 30, 2021, total cash was $51 million compared with $57 million as of Jun 30, 2021.

Total debt was $3.4 billion and net leverage was 3.39 times as of Sep 30, 2021.

Free cash flow in the third quarter was $137 million, better than $91.9 million reported in the previous quarter.

Guidance

For the fourth quarter of 2021, TEGNA expects GAAP revenues to increase in mid-to-high teens percent. Non-GAAP operating expenses are expected to increase in low-to-midsingle digit 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 21.5%- 22%.

Zacks Rank & Stocks to Consider

TEGNA currently has a Zacks Rank #3 (Hold).

AMC Entertainment AMC, Clarus CLAR and BJ's Wholesale Club Holdings BJ are some better-ranked stocks in the broader Consumer & Discretionary sector. All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Both AMC and Clarus are set to report their quarterly results on Nov 8. BJ’s Wholesale is scheduled to report the same on Nov 18.


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