Tegna 1Q Revenue Moves Up 3%

Tegna this morning released first quarter 2019 results that included total revenue of $517 million, up 3% year-over-year and at the high-end of the guidance range provided last quarter.

Adjusted total company revenue, excluding political and estimated incremental Olympic and Super Bowl revenue, was up 8% year-over-year, also at the high-end of guidance.

Subscription revenue came in at a record $242 million, an increase of 18%, driven by rate increases and stable paying subscriber counts.

Total advertising and marketing services revenue declined 7% in the quarter compared to the first quarter of 2018, due to the comparisons against the Olympics and Super Bowl which aired on Tegna’s 17 NBC stations last year. Excluding these sporting events, advertising and marketing services revenue was flat.

Operating expenses were up 5% year-over-year, predominantly driven by higher programming fees. Excluding programming costs, expenses were flat.

Net income from continuing operations was $74 million, an increase of 34% year-over-year, driven by a $12 million gain related to the sale of its interest in Captivate, a $3 million real estate sale gain, as well as FCC repacking reimbursements of $4 million.

Adjusted EBITDA was $153 million, down $4 million, or less than 3% from 1Q 2018, nearly fully offsetting the absence of $21 million of high-margin political, Olympic and Super Bowl revenues.

Dave Lougee, Tegna president-CEO, said: “2019 is off to a good start, and we are executing on both the organic and inorganic components of our strategy. Our subscription revenues posted an 18% year-over-year increase and our key operating metrics all performed at the high-end of our expectations.

“Our paid subscriber counts are extremely stable, and we expect to continue to outperform the industry on this metric due to our geographic footprint in growing markets with attractive demographics.”

Lougee continued, “On the M&A front, we announced the purchase of the Nexstar divestitures, our largest acquisition since becoming a pure-play broadcaster in June 2017. These 11 local television stations complement our existing portfolio of top affiliates and add four key markets to our political footprint, putting us in an even stronger position to benefit from the expected record spending around the 2020 presidential election. This week, we also announced the acquisition of multicast channels Justice Network and Quest, two fast-growing networks that leverage the tailwinds of the increasing numbers of over-the-air viewers.

“As previously announced, we also closed on the acquisitions of WTOL in Toledo, Ohio, and KWES in Midland-Odessa, Texas, in January. “To date in 2019, we have announced or closed on more than $900 million of attractive assets that fit our strategic profile and will be immediately accretive to free cash flow. We will continue to pursue acquisition opportunities that align with our strategy and meet our financial criteria. Leveraging the strength of our balance sheet, we will continue to execute on our plan and create value for shareholders.”

Read the company’s report here.