TEGNA (NYSE: TGNA) reported Q3 EPS of $0.27, $0.01 better than the analyst estimate of $0.26. Revenue for the quarter came in at $552 million versus the consensus estimate of $542.35 million.

THIRD QUARTER HIGHLIGHTS:

• Total company revenue was $552 million, up two percent year-over-year, driven by acquisitions and continued growth in subscription revenue and advertising and marketing services, which more than offset the absence of $60 million of political revenue in the same period last year.
• Adjusted total company revenue, excluding political, was up 14 percent year-over-year.
• Third quarter subscription revenue of $241 million was up 16 percent due to acquisitions and rate increases.
• Net income from continuing operations was $48 million in the third quarter, down $44 million due to the cyclical absence of political revenue, and non-GAAP net income was $58 million.
• Free cash flow for the quarter was $105 million, and the Company ended the quarter with total debt of $4.2 billion and net leverage of 4.9x, on track to delever to approximately 4.1x by the end of 2020.
• Total company Adjusted EBITDA was $157 million, down 13 percent year-over-year as a result of the cyclical absence of high-margin political advertising revenue relative to last year’s third quarter.
• GAAP earnings per diluted share were $0.22 in the third quarter and non-GAAP* earnings per diluted share were $0.27.

CEO COMMENT

“We continue to execute on opportunities to generate value for our shareholders,” said Dave Lougee, president and chief executive officer. “We successfully completed two significant acquisitions that are expected to be EPS accretive within one year and immediately accretive to free cash flow. These transactions support the growth of shareholder value through significant synergies and demonstrate the benefits of our financial discipline when evaluating M&A opportunities. The Dispatch and Nexstar/Tribune stations also expand our footprint of Big Four stations in key strategic markets, many in battleground states that are expected to drive political advertising for the 2020 election. We are proud of our new stations and have growing conviction, now that we have visibility into their operations, that both revenue and mechanical synergies will be at least as high if not greater than anticipated. With enhanced cash flows and significant room under the cap, we have the flexibility to delever while pursuing additional consolidation opportunities.

“Subscription revenues continue to be a source of growth and increased stability in our financial model. We were pleased to reach a recent agreement with Spectrum, beginning a repricing cycle that will result in 85 percent of our subscribers being repriced by year-end 2020. Advertising and marketing services continued on an improved trajectory, growing for the second quarter in a row. These consistent revenue streams, paired with our recent acquisitions and other strategic initiatives, allow for significant upside in our business as we expect to continue to drive value into 2020 and beyond.

“We updated and increased our full year 2019 guidance in September to reflect the completion of the Dispatch and Nexstar/Tribune acquisitions, including an expectation that subscription revenue will be up by a high-teens percentage and free cash flow will comprise 18-19 percent of our 2018/2019 estimated revenue. We will continue to be thoughtful and disciplined in evaluating potential avenues for growth, and executing our long-term strategy to create value for shareholders.”

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