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Why Is TEGNA (TGNA) Down 0.3% Since Last Earnings Report?
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It has been about a month since the last earnings report for TEGNA Inc. (TGNA - Free Report) . Shares have lost about 0.3% 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 catalysts.
TEGNA Q2 Earnings Beat Estimates, Revenues Fall Y/Y
TEGNA’s 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 (AMS) 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.
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 Jun 30, 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.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
The consensus estimate has shifted -7.3% due to these changes.
VGM Scores
Currently, 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 quintile 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
TEGNA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
TEGNA belongs to the Zacks Broadcast Radio and Television industry. Another stock from the same industry, Roku (ROKU - Free Report) , has gained 19.9% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Roku reported revenues of $968.18 million in the last reported quarter, representing a year-over-year change of +14.3%. EPS of -$0.24 for the same period compares with -$0.76 a year ago.
Roku is expected to post a loss of $0.35 per share for the current quarter, representing a year-over-year change of +85%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Roku. Also, the stock has a VGM Score of B.
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Why Is TEGNA (TGNA) Down 0.3% Since Last Earnings Report?
It has been about a month since the last earnings report for TEGNA Inc. (TGNA - Free Report) . Shares have lost about 0.3% 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 catalysts.
TEGNA Q2 Earnings Beat Estimates, Revenues Fall Y/Y
TEGNA’s 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 (AMS) 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.
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 Jun 30, 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.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
The consensus estimate has shifted -7.3% due to these changes.
VGM Scores
Currently, 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 quintile 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
TEGNA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
TEGNA belongs to the Zacks Broadcast Radio and Television industry. Another stock from the same industry, Roku (ROKU - Free Report) , has gained 19.9% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Roku reported revenues of $968.18 million in the last reported quarter, representing a year-over-year change of +14.3%. EPS of -$0.24 for the same period compares with -$0.76 a year ago.
Roku is expected to post a loss of $0.35 per share for the current quarter, representing a year-over-year change of +85%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Roku. Also, the stock has a VGM Score of B.