Nexstar Media Group reported lower fourth-quarter earnings as the company absorbed last year’s acquisition of Tribune Media.
Net income was $113.2 million, or $2.36 a share, down 26% from $153.1 million, or $3.22 a share, a year ago.
Net revenue rose 37.9% to $1.1 billion, reflecting the addition of the Tribune stations, WGN America, a stake in Food Network and other properties.
Advertising revenue rose 28.2% to $562 million despite a 74% drop in political advertising revenue. Core ad revenue was up 76.1%, the company said.
“Nexstar’s 2019 fourth quarter financial results capped an outstanding year for the Company as we delivered another period of record off-cycle political year operating performance with net revenue, profitability, and cash flow metrics (before one-time transaction expenses) exceeding consensus expectations,” said CEO Perry Sook. “2020 is off to a strong start as we embark upon a significant new free cash flow growth cycle which will fuel a material reduction in our net leverage while supporting our goals of driving shareholder returns.”
Sook said the rise in fourth quarter station direct operating expenses primarily reflects a full quarter of incremental expenses related to the operation of the acquired Tribune stations and budgeted increases in network affiliation expense. Fourth quarter pro forma fixed expenses, excluding programming expenses, were down low single digits on a percentage basis.
“With continued double-digit growth in distribution revenue related to recent contract renewals and what many expect to be substantial spending levels related to the upcoming 2020 presidential election cycle, we have excellent visibility to delivering on our free cash flow targets and a clear path for the continued near- and long-term enhancement of shareholder value,” he said.