A month has gone by since the last earnings report for TEGNA Inc. (TGNA Quick QuoteTGNA - Free Report) . Shares have lost about 5.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is TEGNA due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

TEGNA Q1 Earnings Beat Estimates, Revenues Fall Y/Y

TEGNA’s 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.

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 Mar 31, 2024.

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.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -12.5% due to these changes.

VGM Scores

At this time, TEGNA has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, TEGNA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.