The parade of second quarter fiscal report cards ramped up on Wednesday, with the nation’s largest owner of broadcast television stations sharing their results as the sun rose across North Texas.
For Nexstar Media Group, it was a fine three-month period ending June 30, with earnings per share and revenue surpassing Street estimates.
How robust was the second quarter for the company founded by Chairman/CEO Perry Sook?
The recovery is happening at a swifter pace than even Nexstar expected.
Core advertising revenue was up to $423.46 million, from $298.24 million — a 42% improvement from the pandemic-impacted Q2 2020 results. Some $8.51 million in political revenue even benefited Nexstar, with the California gubernatorial recall election poised to benefit the company in such major markets as Los Angeles, where it owns KTLA-5 thanks to the Nexstar-Tribune merger, and KRON-4, the onetime NBC affiliate reborn as a news-heavy MyNetworkTV affiliate.
Total TV advertising revenue increased to $431.97 million from $319.8 million. Distribution fee revenue — a.k.a. retrans dollars — far outpaced the ad revenue.
In Q2, distribution fee revenue climbed to $616.95 million, from $536.54 million — a 15% year-over-year rise.
Then, there’s $73.42 million in digital revenue, jumping from $46.66 million in Q2 2020, a 57% gain.
In all, net revenue jumped to $1.13 billion in Q2, from $914.63 a year ago. This bested the the Zacks Consensus Estimate by 0.76%.
Net income for Q2 improved by 103.5%, rising to $199.76 million ($4.51 per diluted share) from $98.14 million ($2.13) in Q2 2020.
This easily beat the Zacks Consensus Estimate of $3.87 per share.
Yet, NXST was off by 1.8% in midday trading on Wednesday (8/4), to $145.76.
It’s intriguing, as Nexstar share will go ex-dividend on Thursday, August 12.
Do investors know something that EVP/CFO Tom Carter, soon to be President/COO, and incoming CFO Lee Ann Gliha don’t know?
For starters, there is a rumor going around that Sook will soon be calling it a day. Erase that talk from all discussions now, Sook said on the company’s earnings call.
“Recent speculation regarding my retirement is just that, and I look forward to working with Tom, Lee Ann, [President of Broadcasting] Andy Alford; Karen Brophy, our President of Digital; Sean Compton, our President of Networks; and all of our teams at corporate and across the country as we build on our strong growth momentum to continue delivery industry-leading capital returns and creating new value for shareholders.”
What sort of forecast does Sook have to share?
He was vague. This was in contrast to Sinclair’s Q3 forecast shared with investors on its own Q2 earnings call held Wednesday morning. And, this perhaps contributed to a share dip that was -1.25% as of 12:42pm Eastern.
“Looking ahead, with Nexstar’s operating momentum across our businesses, we expect to generate year-over-year growth across all of our non-political revenue sources for the remainder of 2021,” Sook said, with no specifics. “The solid foundation of our assets and operations combined with the resiliency of our business model give consistency to our results and our service to our local communities and local and national advertisers has never been stronger. As such, we continue to have excellent visibility to deliver on or exceed our upsized free cash flow targets in the 2021/2022 cycle as well as a clear path for the continued near- and long-term enhancement of shareholder value.”
The consolidated debt of Nexstar and close shared services partner Mission Broadcasting, owner of such stations as WPIX-11 in New York, as of June 30 was $7.619 billion, including senior secured debt of $4.838 billion.