TEGNA TGNA is set to report first-quarter 2020 results on May 7.
The Zacks Consensus Estimate for earnings currently stands at 37 cents per share, implying 27.6% growth from the figure reported in the year-ago quarter. The bottom-line estimate has been revised a penny downward over the past 30 days.
Moreover, the consensus mark for revenues is currently pegged at $683 million, indicating a 32.2% surge from the year-ago quarter’s reported figure.
Notably, the company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and matched the mark in one, the average positive surprise being 6.52%.
Let’s see how things are shaping up for this announcement.
TEGNA Reports Strong Interim Results
TEGNA reported its preliminary first-quarter 2020 results on Apr 20. Revenues are expected to be $684 million, up 32% year over year and in line with the company’s prior guidance, driven by acquisitions and steady growth in subscription revenues as well as political advertising spending. Excluding political advertising, quarterly revenues are expected to be up 24% year over year.
Non-GAAP diluted earnings are expected to be 43 cents per share, up $48 year over year. Adjusted EBITDA is expected to be $212 million, up 39% year over year, reflecting solid contributions from new as well as existing stations and benefits from the on-going cost-containment efforts.
Factors to Consider
TEGNA’s preliminary first-quarter results reflect benefits of a stable subscriber base. Moreover, the company’s acquisitions of local TV stations comprising the Big Four affiliates are likely to have aided the top line in the to-be-reported quarter.
Further, renewal of CBS and Fox affiliate agreements is expected to have boosted revenues. Apart from higher political advertising spending that might have benefited the top line, solid retransmission rates are expected to have fueled TEGNA’s growth.
Further, we believe that climbing viewership of local news and media consumption due to lockdowns and shelter-in-place guidelines bodes well for the company’s first-quarter results.
However, lower advertising spending due to the coronavirus outbreak is expected to have affected Advertising & Marketing services, which accounts for more than 55% of TEGNA’s revenues.
Additionally, increasing programming fees and investments in content and digital are expected to have weighed on margins in the to-be-reported quarter.
What Our Model Indicates
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
TEGNA has an Earnings ESP of -1.37% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies worth considering from the sector as our model shows that these have the right combination of elements to beat on earnings this reporting cycle:
Shopify SHOP has an Earnings ESP of +23.41% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Inphi Corporation IPHI has an Earnings ESP of +20.04% and is Zacks #2 Ranked.
Take Two Interactive TTWO has an Earnings ESP of +13.24% and a Zacks Rank #2.
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Click to get this free report Take-Two Interactive Software, Inc. (TTWO) : Free Stock Analysis Report Inphi Corporation (IPHI) : Free Stock Analysis Report TEGNA Inc. (TGNA) : Free Stock Analysis Report Shopify Inc. (SHOP) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research