Not even Hurricane Ike could keep this company down, although Nexstar’s Southeastern Texas and Louisiana stations were impacted by the storm for much of September. Q3 revenues grew 9% at Nexstar and, unlike many of its peers, the company is telling Wall Street to expect Q4 to be up as well. CEO Perry Sook says the company is focused on controlling costs and notes that he and other insiders have been buying more shares.
Q3 revenues gained 9% to $70.3 million, with softness in core ad business offset by strong gains in political advertising ($7.8 million), Summer Olympics ($4 million), retransmission consent payments and eMedia revenues. Broadcast cash flow grew 19.9% to $27.3 million.
“Third quarter 2008 retransmission consent revenue grew 37.8% from year-ago levels to $6.2 million, eMedia revenue rose 62.6% to $2.7 million, and the company’s stations captured over $4.0 million of Summer Olympics-related advertising revenue. Our high margin digital revenue streams are expected to continue to grow throughout fourth quarter and 2009 as we renegotiate expiring retransmission consent agreements, enter into agreements with new providers in our markets and benefit from new products and partnerships being added to our eMedia platform,” said Sook. And while ad revenues from traditional sources were down in Q3, he noted that new-to-television local, direct billings totaled $3.7 million in the quarter. And while the automotive category dropped 11%, Sook proudly noted that local dealer advertising was up 5%.
For Q4, Nexstar is looking for core advertising business to be down in the high single digits. However, that will be countered by political, which is already done ($19 million), eMedia and retrans cash. So, the company is telling Wall Street that the quarter’s revenues should be up 9-11.7% to a range of $478-80 million.
Looking further ahead, Sook says Q1 is going to be tough, but that the quarters to fallow in 2009 should be sequentially better.
As for the company’s depressed stock price, Sook said the television sector’s woes are overblown and the stocks oversold. He noted that he recently bought 50,000 shares and that CFO Matt Devine and some other executives have also been buying shares.