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TEGNA (TGNA) Q2 Earnings Beat Estimates, Revenues Fall Y/Y
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TEGNA’s (TGNA - Free Report) second-quarter 2024 non-GAAP earnings of 50 cents per share beat the Zacks Consensus Estimate by 2.04% and increased 13.6% on a year-over-year basis.
Revenues declined 2.9% year over year to $710.4 million and missed the Zacks Consensus Estimate by 1.02%. The year-over-year decline was primarily due to lower subscription and advertising and marketing services revenues, partially offset by higher political advertising dollars.
During the second quarter, TEGNA returned more than $93 million of capital to shareholders with $72 million of share repurchases, representing 5.1 million shares, and paid $21 million in dividends.
Advertising and Marketing Services revenues (51.7% of total revenues) fell 7.3% year over year to $367 million, primarily due to continued macroeconomic headwinds.
Subscription revenues (42.4% of total revenues) decreased 5.3% year over year to $301 million due to a decline in subscribers, partially offset by contractual rate increases. Political revenues (4.5% of total revenues) were $31.6 million, up from $6 million reported in the year-ago quarter.
Other revenues (1.5% of total revenues) were $10.7 million, down 7.9% year over year.
Non-GAAP adjusted EBITDA decreased 9.6% year over year to $175.7 million. Adjusted EBITDA margin contracted 180 basis points (bps) from the year-ago period to 24.7%.
Non-GAAP operating expenses (79.3% of total revenues) of $563.5 million were down 0.4% year over year. This decrease was due to a reduction in programming expenses, partially offset by a rise in compensation expenses.
Non-GAAP operating income declined 11.5% year over year to $146.9 million. The operating margin contracted 200 bps from the year-ago period to 20.7%.
Balance Sheet & Cash Flow
As of Jun 30, 2024, total cash and cash equivalents were $446 million.
Total debt was $3.09 billion, and net leverage was 2.9 times as of Mar 31, 2024.
Free cash flow in the second quarter was $130.6 million compared with $113.1 million reported in the previous quarter.
Outlook
For the third quarter of 2024, Tegna expects total GAAP revenues to increase 9-12%.
Non-GAAP operating expenses are estimated to remain flat to down slightly in the third 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.
GameSquare Holdings is scheduled to report second-quarter 2024 results on Aug 14. The Zacks Consensus Estimate for GAME’s loss per share has narrowed by 2 cents to 9 cents over the past 30 days.
H&R Block is set to report second-quarter 2024 results on Aug 15. The Zacks Consensus Estimate for HRB’s earnings is pegged at $1.71 per share, which has remained unchanged over the past 30 days.
Madison Square Garden Entertainment is slated to report second-quarter 2024 results on Aug 16. The Zacks Consensus Estimate for MSGE’s loss per share is pegged at 57 cents, which has remained unchanged over the past 30 days.
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TEGNA (TGNA) Q2 Earnings Beat Estimates, Revenues Fall Y/Y
TEGNA’s (TGNA - Free Report) second-quarter 2024 non-GAAP earnings of 50 cents per share beat the Zacks Consensus Estimate by 2.04% and increased 13.6% on a year-over-year basis.
Revenues declined 2.9% year over year to $710.4 million and missed the Zacks Consensus Estimate by 1.02%. The year-over-year decline was primarily due to lower subscription and advertising and marketing services revenues, partially offset by higher political advertising dollars.
During the second quarter, TEGNA returned more than $93 million of capital to shareholders with $72 million of share repurchases, representing 5.1 million shares, and paid $21 million in dividends.
TEGNA Inc. Price, Consensus and EPS Surprise
TEGNA Inc. price-consensus-eps-surprise-chart | TEGNA Inc. Quote
Quarter in Details
Advertising and Marketing Services revenues (51.7% of total revenues) fell 7.3% year over year to $367 million, primarily due to continued macroeconomic headwinds.
Subscription revenues (42.4% of total revenues) decreased 5.3% year over year to $301 million due to a decline in subscribers, partially offset by contractual rate increases.
Political revenues (4.5% of total revenues) were $31.6 million, up from $6 million reported in the year-ago quarter.
Other revenues (1.5% of total revenues) were $10.7 million, down 7.9% year over year.
Non-GAAP adjusted EBITDA decreased 9.6% year over year to $175.7 million. Adjusted EBITDA margin contracted 180 basis points (bps) from the year-ago period to 24.7%.
Non-GAAP operating expenses (79.3% of total revenues) of $563.5 million were down 0.4% year over year. This decrease was due to a reduction in programming expenses, partially offset by a rise in compensation expenses.
Non-GAAP operating income declined 11.5% year over year to $146.9 million. The operating margin contracted 200 bps from the year-ago period to 20.7%.
Balance Sheet & Cash Flow
As of Jun 30, 2024, total cash and cash equivalents were $446 million.
Total debt was $3.09 billion, and net leverage was 2.9 times as of Mar 31, 2024.
Free cash flow in the second quarter was $130.6 million compared with $113.1 million reported in the previous quarter.
Outlook
For the third quarter of 2024, Tegna expects total GAAP revenues to increase 9-12%.
Non-GAAP operating expenses are estimated to remain flat to down slightly in the third 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 GameSquare Holdings, Inc. (GAME - Free Report) , H&R Block (HRB - Free Report) and Madison Square Garden Entertainment Corp. (MSGE - 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.
GameSquare Holdings is scheduled to report second-quarter 2024 results on Aug 14. The Zacks Consensus Estimate for GAME’s loss per share has narrowed by 2 cents to 9 cents over the past 30 days.
H&R Block is set to report second-quarter 2024 results on Aug 15. The Zacks Consensus Estimate for HRB’s earnings is pegged at $1.71 per share, which has remained unchanged over the past 30 days.
Madison Square Garden Entertainment is slated to report second-quarter 2024 results on Aug 16. The Zacks Consensus Estimate for MSGE’s loss per share is pegged at 57 cents, which has remained unchanged over the past 30 days.