TEGNA (TGNA) Tops Q4 EPS by 4c, Revenues Beat

TEGNA (NYSE: TGNA) reported Q4 EPS of $0.74, $0.04 better than the analyst estimate of $0.70. Revenue for the quarter came in at $642 million versus the consensus estimate of $636.86 million.

• Record total company revenue of $642 million was up 31 percent.
• Adjusted EBITDA was a fourth quarter record at $273 million, a 61 percent increase year-over-year, and $781 million for the full year, a 24 percent increase. Net income from continuing operations for the fourth quarter was $161 million.
• Record fourth quarter free cash flow of $167 million and $469 million for the full year enabled a reduction in the Company’s debt to under $3 billion. Net cash flow from operating activities for the fourth quarter was $195 million.
• GAAP and non-GAAP* earnings per diluted share from continuing operations were $0.74 in the fourth quarter, an increase of 131 percent year-over-year. Full year GAAP diluted earnings per share was $1.85, and full year non-GAAP diluted earnings per share was $1.83.
• Subsequent to quarter-end, successfully completed the acquisition of leading local media brands, CBS affiliate WTOL in Toledo, OH and NBC affiliate KWES in Midland-Odessa, TX, in a $105 million transaction which closed on January 2.

“We continue to benefit from the strength of our stations and industry-leading subscription trends,” said Dave Lougee, president and chief executive officer, TEGNA. “Eight consecutive months of year-over-year subscriber growth have resulted in a healthy increase to high-margin subscription revenues, which are largely immune to any external macroeconomic pressures. Our subscription revenues also continue to grow through strong annual escalators under our existing agreements with both traditional and new over-the-top (“OTT”) MVPDs. Additionally, we will be negotiating 50 percent of our paid subscriber base during the fourth quarter of this year. On the reverse compensation side of the equation, we have renegotiated our affiliation agreement with ABC through late 2023 and our existing NBC agreement goes through early 2021. This provides us with good visibility into the cash flow growth associated with our subscription revenues.”

Lougee continued, “Our record free cash flow in the fourth quarter enabled us to pay down debt, invest in new products and initiatives, and capitalize on accretive acquisition opportunities. Our portfolio continues to evolve toward a higher percentage of subscription and political revenues, totaling roughly half of our 2018 revenues. This trend, along with strong station performance, were key drivers of the 16 percent increase in total revenue for the year. These growing subscription and record political advertising revenues reflect the increased demand for our content through OTT platforms, and the critical role that TEGNA stations play in any political campaign strategy.”

“Going forward, through innovation and execution, we will continue to drive organic growth and create value for our shareholders. And with our strong balance sheet, we remain committed to proactively pursue M&A opportunities that align with our long-term strategy,” Lougee concluded.

For earnings history and earnings-related data on TEGNA (TGNA) click here.

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