Tegna reported lower earnings in the fourth quarter but predicted a record year in 2020 when political ad spending returns.
Net income from continuing operations was $84 million, or 38 cents a share, down from $161 million, or 74 cents, a year ago.
Revenue grew 8.1% to $694 million, driven by acquisitions in a non-election year. Subscription revenue was up 31% and advertising and marketing service revenue rose 35%.
Tenga is under pressure from activist investor Standard General, which earlier this year said it had a 9% stake in the broadcaster and was seeking seats on Tegna’s board.
Tegna has resisted Standard General's assertions that the company’s stock price should be higher and its operations should be more efficient.
Among the special items in Tegna’s earnings report was $6.1 million in adviser fees related to defending the company against the activist investor.
“Tegna ended the year on a high note, driven by excellent performance across our business and strong momentum from our key growth drivers,” said CEO Dave Lougee.
“Looking ahead, subscription and political advertising will represent about half of Tegna’s revenue in the ’19-’20 cycle and higher going forward, and are relatively immune from secular trends,” Lougee said. “We have repriced roughly half of our subscribers to date and will have repriced 85% by the end of this year. The significant rate increases we have locked in for the first year, and subsequent rate escalators for the following years, continue to support our top-of-market Big Four retransmission rates. “
Lougee predicted that 2020 will be a record year for political advertising, producing more than $300 million in revenue. He added that acquisitions had expanded its portfolio into more key political markets.
“We expect, and are more confident than ever, that Tegna is poised for a record year as a result of prior investments and operational excellence.”
The company’s guidance for the first quarter calls for revenue to increase in the low to mid 30% range (or in the 20s excluding political).