Nexstar Broadcasting Group, which intends to purchase Media General in a cash-and-stock deal, saw its Q2 income rise by $4.2 million. Analysts expected more, and Nexstar shares slumped on Tuesday.
Nexstar’s Q2 net income rose from $20.3 million (63 cents per share) to $24.5 million (78 cents per share). The average estimate of five analysts surveyed by Zacks Investment Research was 83 cents per share.
Net revenue grew from $219.4 million to $262 million, beating Zacks analysts’ average estimate of $260.7 million. Adjusted EBITDA in Q2 increased from $74.9 million to $90.2 million.
That wasn’t enough to placate disappointed investors, which have seen Nexstar shares grow from a 52-week low of $35.55 on February 11 to a recent high of $55.09 on July 20. The gains nearly wiped out a more than $20 per share freefall in NXST shares seen between January 6 and February 11.
That dip is likely directly attributed to shareholder frustration over Nexstar’s merger acquisition with Media General, which if approved by federal regulators would have Nexstar acquire all outstanding Media General shares at $10.55 per share in cash and 0.1249 of a share of Nexstar Class A common stock for each Media General share.
At the closing bell, Nexstar shares were down $1.50, to $50.61. Volume was exceptionally high, nearly doubling its average with 840,620 traded.