TEGNA’s TGNA third-quarter 2022 non-GAAP earnings of 65 cents per share missed the Zacks Consensus Estimate by 9.72% but increased 12.1% on a year-over-year basis.
Revenues increased 6.2% year over year to $803.1 million but missed the consensus mark by 4.71%. The year-over-year growth can be attributed to an increase in political and subscription revenues.
Notably, in February, Tegna entered into a definitive agreement to be acquired by an affiliate of Standard General for $24 per share in cash and become a private company.
The transaction, which was unanimously approved by the Tegna Board, has an equity value of around $5.4 billion and an enterprise value of $8.6 billion, including the assumption of debt.
However, in September end, the Federal Communications Commission put the acquisition under scrutiny and asked the investment firm, Standard General, to produce further information to review applications seeking consent to transfer control of Tegna's subsidiaries.
The acquisition is expected to be completed in the second half of 2022, subject to above mentioned regulatory approvals and customary closing conditions.
Quarter in Detail
Subscription (47% of revenues) revenues increased 2.4% year over year to $377.4 million, driven by rate increases and partially offset by subscriber declines.
Advertising and Marketing services (39.9% of revenues) revenues decreased 11.9% year over year to $320.8 million due to political displacement, the absence of last year’s summer Olympics and macroeconomic headwinds.
Political (11.6% of revenues) revenues were $92.9 million, up 518.9% year over year.
Other revenues (1.5% of revenues) were $12.1 million, up 40.9% year over year.
Non-GAAP adjusted EBITDA increased 8.8% year over year to $266 million. Adjusted EBITDA margin expanded 80 basis points (bps) from the year-ago period to 33.1%.
Non-GAAP operating expenses (71.1% of revenues) of $570.9 million were up 4.7% year over year.
Non-GAAP operating income increased 9.9% year over year to $232.3 million. The operating margin expanded 100 bps from the year-ago period to 28.9%.
TEGNA Inc. Price, Consensus and EPS Surprise
TEGNA Inc. price-consensus-eps-surprise-chart | TEGNA Inc. Quote
Balance Sheet & Cash Flow
As of Sep 30, 2022, total cash was $377 million compared with $201 million as of Jun 30, 2022.
Total debt was $3.1 billion, and net leverage was 2.53 times as of Sep 30, 2022.
Free cash flow in the third quarter was $148.4 million compared with $162 million reported in the previous quarter.
Zacks Rank & Stocks to Consider
TEGNA currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Zacks Consumer Discretionary sector are Toshiba TOSYY, Virco Manufacturing VIRC and Oxford Industries OXM, each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Toshiba shares have declined 18% in the year-to-date period compared with Zacks Consumer Discretionary sector’s fall of 37.8%.
Virco Manufacturing shares are up 37.6% in the year-to-date period. The company is expected to report its third quarter fiscal 2023 earnings on Dec 12.
Oxford shares are down 8.1% in the year-to-date period. The company is expected to report its third quarter fiscal 2023 earnings on Dec 14.
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