Gray TV’s Q2 Review: Upbeat Street Beat Despite COVID-19 Revenue Clip


“Business fell off a cliff,” Gray Television Executive Chairman and CEO Hilton Howell Jr. said at the start of the broadcast media company’s Q2 2020 earnings call. “It was deep, and unknown.”

Yet, Howell continued, as the second quarter deteriorated, each month got better. “In every cloud there is a silver lining,” he said, with an air of optimism. “Our business slowed less than we feared, and it got better faster than we thought it would.”

With no major mergers to pump up the dollars, as seen with contemporaries Nexstar Media Group and Sinclair Broadcast Group, Gray’s April 2020 revenue was off by 38%, while May revenue was off 34% year-over-year.

Then came June. Revenue declined by only 17% — a significant improvement as shelter-at-home restrictions across many of the company’s markets melted away in the summer heat. And, with no receipt of any stimulus funds from any government program (unlike iHeartMedia, which is taking $100 million from the CARES Act adopted at the height of the COVID-19 pandemic), Gray investors should be pleased with the path to recovery the company is on.

“In many of our markets individual stations met or beat their pre-COVID budgets in June,” Howell declared.

As its markets improve, Q3 political dollars are pacing with high-single digit to low double-digit growth. As such, Gray executives shared during a Thursday morning earnings call for analysts and investors that, while still in decline, Q3 total core revenue could be down only between 10% and 15% for the three month period ending September 30.

Gray COO Robert Smith says this is a “dramatic improvement over Q2,” based on current pacings. But, he noted that this data should not be considered formal guidance. “We remain cautiously optimistic about total core revenue,” Smith said.


Gray’s revenue for the second quarter of 2020 was $451 million, a decrease of 11% ($57 million) from Q2 2019. Combined local and national broadcast advertising revenue came in at $198 million, while political advertising contributed revenue of $21 million, rising from $5 million.

The largest revenue source in Q2 for Gray? The ATVA and pro-MVPD groups won’t be pleased.

It was retransmission revenue, outpacing ad revenue by $22 million by coming in at $220 million in the quarter, up 9% year-over-year.

That couldn’t overcome a swing to a net loss of $2 million ($0.02 per share), compared to net income of $31 million (31 cents) a year ago.

This is good news for investors, as the Zacks Consensus Estimate was for a Q2 2020 EPS loss of $0.08.

Further, the Q2 revenue surpassed the Zacks Consensus Estimate by 4.28%.

Investors seem pleased with the results: GTN was up 5% to $14.91 as of 11:19am Eastern. These shares are not to be confused with Gray’s Class A shares, which are super-voting in nature and were valued at $13.15.