The TV broadcast group reports that $6.3 million in political advertising contributed to the 16.3% year-over-year revenue growth in the third quarter. Fourth-quarter growth could near 19%, the company says.
Nexstar Broadcasting Group reported this morning that net revenue grew to $63.6 million in the third quarter—a 16.3% increase over the same period of 2005.
“I continue to be very pleased with our execution,” Nexstar CEO Perry Sook told securities analysts on a conference call following the released of the quarterly earnings this morning.
Third-quarter broadcast cash flow, EBITDA and free cash flow increased 43%, 45% and 50%, respectively, Sook said. The increases “clearly highlight the significant leverage in our operating model, our ability to manage costs and the value of geographic and network diversification.”
Excluding $6.3 million in political revenue is the quarter, gross local and national advertising grew 5.7% year over year. Sook said that Nexstar salespeople turned up $3.8 million in new local business in the quarter, 28% more than in the prior year third quarter.
The revenue growth “demonstrates that we continue to outpace the industry,” said Sook. And the political money “reflects the strong appeal of our high quality local news programming.”
According to Sook, seven or the top 10 and 26 top 40 advertising categories showed year-over-year growth in the quarter. In addition to political, the positive categories included medical/health, insurance, pay programming, automotive, furniture and entertainment. The auto increase was “minimal,” but better than most other station groups, he said.
The company said it expects even stronger year-over-year net revenue growth in the fourth quarter. Its projection of 14%-18.8% growth assumes about $15 million in political advertising, it said. “We will again show tremendous leverage on this revenue growth, given our expectation for only modest increases in station operating expenses and our corporate overhead,” Sook said.
Nexstar is a pure-play TV station company, which owns, programs or manages 47 stations in 27 markets. The group includes affiliates of all the major broadcast networks and reaches 8% of the nation’s TV homes.