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TEGNA (TGNA) Q1 Earnings Beat Estimates, Revenues Fall Y/Y
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TEGNA’s (TGNA - Free Report) first-quarter 2024 non-GAAP earnings of 45 cents per share beat the Zacks Consensus Estimate by 4.65% but decreased 4.3% on a year-over-year basis.
Revenues declined 3.5% year over year to $714.25 million and missed the Zacks Consensus Estimate by 0.51%. The year-over-year decline was due to lower subscription revenues, which were adversely impacted by a temporary disruption of service with a distribution partner, partially offset by higher political advertising revenues.
During the first quarter, TEGNA returned more than $100 million of capital to shareholders with $82 million of share repurchases, representing 5.7 million shares, and paid $20 million in dividends.
Subscription revenues (52.5% of total revenues) decreased 9.4% year over year to $375.3 million due to a decline in subscribers and a temporary disruption of service with a distribution partner.
Advertising and Marketing Services revenues (41.8% of total revenues) dipped 3% year over year to $298.7 million, primarily due to continued macroeconomic headwinds.
Political revenues (3.9% of total revenues) were $27.8 million, up from $5.3 million reported in the year-ago quarter.
Other revenues (1.7% of total revenues) were $12.4 million, down 3.9% year over year.
Non-GAAP adjusted EBITDA plunged 15% year over year to $174.2 million. Adjusted EBITDA margin contracted 330 basis points (bps) from the year-ago period to 24.4%.
Non-GAAP operating expenses (79.5% of total revenues) of $568 million were up 0.7% year over year. This increase was due to a rise in compensation expenses, partially offset by a reduction in programming expenses.
Non-GAAP operating income declined 17.1% year over year to $146.2 million. The operating margin contracted 330 bps from the year-ago period to 20.5%.
Balance Sheet & Cash Flow
As of Mar 31, 2024, total cash and cash equivalents were $431 million.
Total debt was $2.66 billion and net leverage was 2.8 times as of Dec 31, 2023.
Free cash flow in the first quarter was $113.1 million compared with $130 million reported in the previous quarter.
Outlook
For the second quarter of 2024, Tegna expects total GAAP revenues to decline in the low-to-mid single digits.
Non-GAAP operating expenses are estimated to remain flat in the second quarter.
For 2024, TGNA expects the net leverage ratio to be below 3x. The company expects 2024/2025 two-year adjusted FCF between $900 million and $1.1 billion.
Shares of Roblox have lost 14.6% year to date. The Zacks Consensus Estimate for RBLX’s first-quarter loss per share has widened by a penny to 53 cents over the past 30 days.
Shares of SharkNinja have jumped 31% year to date. The Zacks Consensus Estimate for SN’s earnings is pegged at 95 cents per share, up 4.4% over the past 30 days.
Shares of TTWO have lost 9.3% year to date. The Zacks Consensus Estimate for TTWO’s earnings is pegged at 22 cents per share, which has remained unchanged over the past 30 days.
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TEGNA (TGNA) Q1 Earnings Beat Estimates, Revenues Fall Y/Y
TEGNA’s (TGNA - Free Report) first-quarter 2024 non-GAAP earnings of 45 cents per share beat the Zacks Consensus Estimate by 4.65% but decreased 4.3% on a year-over-year basis.
Revenues declined 3.5% year over year to $714.25 million and missed the Zacks Consensus Estimate by 0.51%. The year-over-year decline was due to lower subscription revenues, which were adversely impacted by a temporary disruption of service with a distribution partner, partially offset by higher political advertising revenues.
During the first quarter, TEGNA returned more than $100 million of capital to shareholders with $82 million of share repurchases, representing 5.7 million shares, and paid $20 million in dividends.
TEGNA Inc. Price, Consensus and EPS Surprise
TEGNA Inc. price-consensus-eps-surprise-chart | TEGNA Inc. Quote
Quarter in Details
Subscription revenues (52.5% of total revenues) decreased 9.4% year over year to $375.3 million due to a decline in subscribers and a temporary disruption of service with a distribution partner.
Advertising and Marketing Services revenues (41.8% of total revenues) dipped 3% year over year to $298.7 million, primarily due to continued macroeconomic headwinds.
Political revenues (3.9% of total revenues) were $27.8 million, up from $5.3 million reported in the year-ago quarter.
Other revenues (1.7% of total revenues) were $12.4 million, down 3.9% year over year.
Non-GAAP adjusted EBITDA plunged 15% year over year to $174.2 million. Adjusted EBITDA margin contracted 330 basis points (bps) from the year-ago period to 24.4%.
Non-GAAP operating expenses (79.5% of total revenues) of $568 million were up 0.7% year over year. This increase was due to a rise in compensation expenses, partially offset by a reduction in programming expenses.
Non-GAAP operating income declined 17.1% year over year to $146.2 million. The operating margin contracted 330 bps from the year-ago period to 20.5%.
Balance Sheet & Cash Flow
As of Mar 31, 2024, total cash and cash equivalents were $431 million.
Total debt was $2.66 billion and net leverage was 2.8 times as of Dec 31, 2023.
Free cash flow in the first quarter was $113.1 million compared with $130 million reported in the previous quarter.
Outlook
For the second quarter of 2024, Tegna expects total GAAP revenues to decline in the low-to-mid single digits.
Non-GAAP operating expenses are estimated to remain flat in the second quarter.
For 2024, TGNA expects the net leverage ratio to be below 3x. The company expects 2024/2025 two-year adjusted FCF between $900 million and $1.1 billion.
Zacks Rank & Key Picks
TEGNA carries a Zacks Rank #3 (Hold) at present.
Some better-ranked stocks in the Consumer Discretionary sector are Roblox (RBLX - Free Report) , SharkNinja, Inc. (SN - Free Report) and Take-Two Interactive Software (TTWO - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Roblox have lost 14.6% year to date. The Zacks Consensus Estimate for RBLX’s first-quarter loss per share has widened by a penny to 53 cents over the past 30 days.
Shares of SharkNinja have jumped 31% year to date. The Zacks Consensus Estimate for SN’s earnings is pegged at 95 cents per share, up 4.4% over the past 30 days.
Shares of TTWO have lost 9.3% year to date. The Zacks Consensus Estimate for TTWO’s earnings is pegged at 22 cents per share, which has remained unchanged over the past 30 days.