Tegna’s 4Q Revenue Falls 10.3%

Tegna this morning released fourth quarter results that included total revenue of $490.3 million, down 10.3% from the same quarter a year ago as a result of non-election year political ad revenue. Factoring out political, revenue increased 9.2% to $480.5 million.

Net income from continuing operations was $303.3 million, again helped by the $221 million benefit from the tax legislation.

Fourth quarter total company operating expenses were

Operating income declined 26% percent compared to 4Q 2016.

The following summarizes the year-over-year changes in revenue categories (Tegna now reports the revenue line “advertising and marketing services,” which reflects the sales transformation strategy which focuses on customer needs versus specific products. This category includes all advertising and marketing-related revenue, including Premion, Hatch, G/O Digital and television.)

• Advertising and Marketing Services were $296.5 million, down 2.1%.

• Political was $9.8 million, down 89%.

• Subscription was $178 million, up 22.7%.

For the full year, total operating revenues were $1.9 billion, a decline of 5% from 2016 reflecting primarily a $169 million decline in incremental political, Olympic and Super Bowl advertising revenue. Excluding those factors, as well as $17 million of terminated digital marketing services business revenue in 2017 and $64 million in 2016, total company revenue was up 7%.

Dave Lougee, president-CEO, said: “Tegna in 2017 became a pure-play media company, and this focus and strategic clarity has produced tangible results. Fourth quarter revenue grew nine percent and full-year revenue grew seven percent on a comparable basis on the strength of our growth in subscription revenue and innovation initiatives.

“On top of our financial performance, our content transformation efforts produced multiple new formats, original programs and digital-first investigations, earning us more national honors than any other local broadcaster, as we continue to execute on our strategy of redefining local journalism in the digital age. Organic growth initiatives, such as Premion, an innovative solution for over-the-top (OTT) advertising that reaches cord cutters, are expanding our revenue base and giving us access to new markets.”

Lougee continued, “As we begin 2018, our NBC stations took the number one spot among all NBC affiliates during the Super Bowl for ratings in Buffalo and share in Minneapolis. In the key adults 25-54 demographic, Tegna stations had four of the top 10 spots in ratings. For the Olympics, Tegna stations held four of the top seven spots in ratings among all NBC affiliates in the key adults 25-54 demographic, and our stations in Denver and Minneapolis took the number one and two spots, respectively.

“Our acquisition of Midwest Television’s broadcasting stations in San Diego, the 29th largest U.S. TV market, will further strengthen our portfolio of Big 4 affiliates in top markets. Our strong balance sheet gives us the flexibility to continue to invest opportunistically in both organic and inorganic growth, and our culture and scale position us to continue to create value for our shareholders, customers, and audiences,” Lougee concluded.