Q1 political revenues were ahead of expectations and April alone already brought in more political spending than all of Q1 for Nexstar, so Q2 is also going to be strong. That, along with retrans and new media money, has countered the soft ad market and Nexstar’s Q1 net revenues rose 2.6% to $63.7 million. Broadcast cash flow rose to $21.3 million from $20.8 million a year ago.
CEO Perry Sook is upbeat on his company’s recent decision to move national representation for 22 stations from Petry to Katz (3/27/08 TVBR #61). More important, though, is building high-margin local direct business. Sook noted proudly that his stations added $2.9 million in direct business from new, local accounts in Q1. Retrans revenues rose 18% to $4.6 million and new media revenues ballooned to $2 million from only a quarter million a year ago.
Political spending, of course, is already a big factor this year and will be even bigger as the fall general election approaches. Q2 revenues are expected to be up 1.2-4.1%. Sook noted that heavy spending in April alone, primarily for the Indiana primary, had already beaten the three-month take for Q1. Asked about the underlying non-political business, Sook said it was running flat to slightly up.
RBR/TVBR observation: What’s with the stock price? CEO Perry Sook hadn’t checked his own stock price prior to the call, so he was a bit surprised to hear that Nexstar’s stock had fallen nearly 6%, despite the revenue gains in Q1 and favorable outlook for Q2. The stock later recovered that lost ground. But it goes to show that even good performance isn’t much help in this beaten down market for TV stocks.