No Political Dip For Gray In Q1

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Here’s something every media company would like to see in its Q1 results: Despite an 86% drop in political advertising, Gray Television enjoyed a 17% year-over-year jump in its total revenue as its net income surpassed $10 million.


That’s on an as-reported basis, however. On a “combined historical basis,” total revenue slipped by 1%, to $203.9 million.

Nevertheless, all signs point to a strong Q1 for the TV company, which today (5/4) purchased long-time CBS affiliate WCAX-3 in Burlington, Vt., for $29 million from the Martin family.

Net income increased to $10.5 million (14 cents per diluted share), from $9 million (12 cents).

Net revenue on an as-reported basis grew to $203.5 million, from $173.7 million.

Meanwhile, Gray in Q1 recorded a loss from the early extinguishment of approximately $2.5 million in debt, or $1.5 million after tax, related to the amendment and restatement of its senior credit facility.

On a combined historical basis, there were some advertising challenges for Gray.

Local advertising revenue (including internet/digital/mobile) fell $1.1 million, or 1%, to $103.7 million, in Q1. At the same time, national advertising revenue decreased $1.9 million, or 7%, to $25.2 million.

Political advertising revenue dipped 90%, to $1.3 million.

Like many TV companies, retransmission consent revenue is integral to income, and for Gray it increased $13.9 million, or 25%, in Q1, to $68.6 million.

Gray says local and national advertising revenue declined, in part, due to difficult Super Bowl comps: The 2017 Super Bowl was telecast on FOX-affiliated stations, of which Gray has less compared to in 2016, when the game aired on CBS. The difference? Some $1.5 million, with just $600,000 in revenue tied to this year’s Big Game.

By category, automotive was unchanged; medical dipped 1%; restaurants sank 10%; durniture and appliances decreased 2%; and communications companies grew their ad budgets by 5%.

Investors appear to be displeased with the results. Just minutes before Thursday’s Closing Bell on Wall Street, shares in “GTN” were off 4.7%, to $12.80.