Nexstar Surges In Q2, Fueled By Media General Properties


The addition of the Media General TV stations to Nexstar Media Group significantly impacted its bottom line in Q2: Nexstar enjoyed a 139% net revenue rise to a record $626.1 million.

Nexstar’s saw net revenue of $262 million in Q2 2016, but this was before the integration of the former Media General stations.

Net income attributable to Nexstar grew to $44 million (91 cents per diluted share), from $24.5 million (78 cents).

Broadcast cash flow rose to $226.9 million, from $103.2 million.

Adjusted EBITDA increased to $202.2 million, from $90.2 million. Free Cash Flow surged to $139 million, from $48.6 million.

Looking forward, Nexstar says it will — like other broadcast TV companies — will face tough comps in Q3 due to the 2016 Summer Olympics. But, the company said, “As Nexstar continues to execute very well in terms of operations, integration and synergy realization, we will maintain our growth momentum including record financial results in the quarter and second half of 2017.”

Again, this is entirely due to the addition of Media General’s stations.

Speaking of his company’s Q2 results, Nexstar Chairman and President/CEO Perry Sook said, “Nexstar’s operating and financial growth momentum, as well as our focus on shareholder returns, was highlighted again in the Q2 as we delivered another period of record results with top line, profitability, and cash flow metrics exceeding consensus expectations.”

Sook noted that 51% of Nexstar’s Q2 gross revenue was derived from non-core advertising revenue sources. “The ongoing shift of our revenue mix reflects our long-term initiatives to build scale and diversify revenue through our focus on high growth retransmission and digital opportunities,” he said.

What he did not elaborate on is this fact: Q2 core television ad revenue growth of 146.5% was outpaced by a 157.9% rise in retransmission fee revenue … and a 157.4% increase in digital media revenue. But, it is the retrans fee dollar jump that will raise eyebrows among some who feel this revenue boost presents challenges for MVPDs, in particular smaller telcos and American Cable Association (ACA) members.

During Q2 Nexstar repurchased slightly more than 1 million Nexstar shares, paid its 18th consecutive quarterly cash dividend and completed a refinancing. With the repurchase activity, Nexstar’s basic share count was reduced to 46.2 million.