Tegna Reports Lower Earnings In Third Quarter

Revenue down following Olympic, election bonanza

Tegna reported lower third-quarter earnings and revenue in non-Olympics and non-election year.

The TV station owner said income from continuing operations was $50.8 million, or 23 cents a share, compared  $76.7 million, or 35 cents a share a year ago.

Revenues were down 11% to $464.3 million. A year ago the Olympics generated $57 million worth of ad revenues and it had $34 million more in political ad revenue. Subscription revenue was up 24% to $177.7 million.

“Tegna has finalized our transition into a pure-play media company, and the third quarter results demonstrate the power of our model. Our revenue on a comparable basis grew five percent, in line with guidance. We are executing our strategy as a best-in-class operator, transforming our content, sales and marketing offerings and generating strong cash flow,” said CEO Dave Lougee.

 “As we look to 2018, TEGNA will benefit from some substantial tailwinds, including the Winter Olympics and the Super Bowl on our outperforming NBC stations in the first quarter, as well as our favorable political footprint for the mid-term elections combined with execution against our innovation initiatives, will result in a very strong 2018 performance,” Lougee said. “Looking beyond 2018, as the largest owner of big four affiliates in the top 25 markets, Tegna is uniquely positioned to benefit from the anticipated in-market ownership rule changes proposed by the FCC. Our strong balance sheet gives us the flexibility to invest opportunistically in both organic and inorganic growth.”

Tegna said its Premion OTT advertising business, generated 92% more revenue in the third quarter than in the second quarter.

The company said it launched redesigned mobile sites in 34 markets and had a 71% increase in mobile video plays in the third quarter compared to second quarter. Unique visitors  averaged 38 million in the quarter, up 16% from Q2.

In its outlook, Tegna said fourth quarter revenues are expected to decrease by high single- to low-doubled digits. The company said that in the fourth quarter, the cyclical comparisons will be even tougher, with the absence of about $82 million in net political advertising.

Adjusted revenue is expected to be up by high single to low double-digits.

“Our outlook also reflects the absence of $16 million of revenue from the terminated digital businesses previously reported in the Digital Segment,” said Victoria Harker, executive VP and CFO.