Of course, political was big last year, so Gray is telling Wall Street that total revenues are expected to be down 1-2% in Q2. That’s in line with Q1, which had to deal not only with tough political comps, but also the lack of the Olympics and fewer stations carrying the Super Bowl. Excluding political, Gray is looking for local to be up 4% and national 1% in Q2
“Total revenue decreased $0.8 million, or 1%, to $69.7 million for the first quarter of 2011 compared to the first quarter of 2010 primarily due to decreased national and political advertising revenue, partially offset by increased local and internet advertising revenue and retransmission consent revenue. Political advertising revenue decreased due to decreased advertising from political candidates and special interest groups in the “off year” of the two year election cycle. Net advertising revenue associated with the broadcast of the 2011 Super Bowl on our one primary FOX-affiliated channel and four secondary digital FOX-affiliated channels approximated $0.2 million which was a decrease from our approximated $0.9 million earned in 2010 in connection with the broadcast of the 2010 Super Bowl on our seventeen CBS-affiliated channels. In addition, results in the first quarter of 2010 benefited from approximately $2.8 million of net revenue earned from the broadcast of the 2010 Winter Olympic Games on our NBC-affiliated channels. There was no corresponding broadcast of Olympic Games during the first quarter of 2011. Retransmission consent revenue increased due to the improved terms of our retransmission contracts compared to those of the first quarter of 2010. We continued to earn base consulting revenue under our agreement with Young Broadcasting, Inc.; however, we did not record any incentive consulting revenue in the first quarter of 2011 based on its operating results,” Gray said in an announcement ahead of its management conference call with analysts.
It was a mixed quarter. Local rose 1% to $43.8 million and Internet advertising revenues grew 38% to $4.2 million, but national was down 7% to $13 million and political, of course, plunged 50% to $1.4 million.
Retransmission revenues were up 9% to $5 million and Gray received $600K from its consulting agreement with Young Broadcasting.
Everyone has been keeping a close eye on how automotive is doing in this cycle of Wall Street earnings reports. For Gray, auto was up 3% in Q1.
Wells Fargo Securities analyst Marci Ryvicker noted that Gray beat the consensus estimate for revenues in Q1 and came in at the top end of management’s guidance. However, she called the Q2 guidance “mixed,” with revenues higher than expected, but also higher than expected expenses.