Despite lower presidential campaign spending than expected, Tegna’s broadcast group hit a record $529.1 million in revenue during the fourth quarter of 2016, the company said Monday.
That number is 14.5% higher than the broadcast group’s 4Q 2015 earnings, Tegna said.
The growth was driven by an $80.2 million increase in political advertising and a $25.5 million increase in retransmission revenues, according to the company’s earnings report. The increases were partially offset by a decline in core advertising due to the displacement effect of political advertising in the quarter, it said.
In Monday’s earning call, Tegna Media president Dave Lougee said Tegna is expecting “stronger than projected” retransmission revenue in 2017. The projected 24% increase will substantially narrow the projected gap between retransmission and reverse compensation fees to $25 million-$30 million, from the $48 million originally projected.
The “current political energy and activities” bode well for “healthy” political spending in 2018, Lougee said. Additionally, negotiations with OTT providers – both existing pay-TV providers such as Dish and DirecTV and new entrants – are laying the groundwork for Tegna to get into the space more fully without negative economic impacts, he said.
Based on current trends, however, Tegna said it expects media segment revenue in the first quarter of 2017 to be flat to slightly above the first quarter of 2016. The year-over-year comparison will be unfavorably impacted by substantially lower political advertising revenue ($16 million in the first quarter of 2016) and the move of the Super Bowl to the company’s three small Fox affiliates in 2017 from its 11 CBS stations in 2016, the company said.
Excluding the unfavorable impact of the Super Bowl shift (approximately $9 million) and lower politically related advertising, the percentage increase in media segment revenues is expected to be up in the mid-single digits in the first quarter of 2017 compared to the first quarter of 2016.
Other 4Q highlights include:
- GAAP earnings per diluted share from continuing operations of $0.61. Non-GAAP earnings per diluted share from continuing operations of $0.74, a 40% increase compared to the fourth quarter of 2015.
- Total company revenues were 10% higher driven by strong Media Segment results.
- Net income from continuing operations was $133 million; Adjusted EBITDA totaled $350 million, a 15% increase year-over-year.
- Net cash flow from operating activities totaled $229 million; Free cash flow was $202 million.
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