On Sept. 19, 2019, the former Tribune Media properties, including WGN America, officially joined the Nexstar Media Group family.
As such, it’s only natural that Nexstar’s second quarter earnings showed year-over-year growth, even during a crippling pandemic.
So … how did Nexstar perform on a same-station basis?
BE SURE TO LIKE RBR+TVBR ON FACEBOOK!
Nexstar President/CEO Perry Sook, the broadcast TV company’s founder, began his company’s earnings call by reading his prepared quote distributed earlier in the day Wednesday: A 41% rise in second quarter net revenue reflects growth in total television advertising revenue “as we drove year-over-year increases in same station new-to-television business and strong shares of political spending in our markets,” Sook said.
That was the only mention of “same-station” performance offered by Nexstar.
But, investors should be very happy that the Zacks Consensus Estimate offered July 29 on Nexstar’s Q2 was way off.
Zacks crunched the numbers and expected earnings per share of $1.28, dipping 9.9%. It anticipated Q2 2020 revenue of $905.85 million, up 39.6% year-over-year.
Nexstar in Q2 enjoyed net revenue of $914.63 million, rising from $649 million, as net income attributable to Nexstar jumped to $99.6 million ($2.13 per diluted share), from $68 million ($1.42).
Broadcast cash flow grew to $290.78 million, rising from $227.46 million.
Adjusted EBITDA totaled $298.84 million, an increase from $197.04 million in Q2 2019.
The Street beat helped propel Nexstar shares to their best performance since early June, when it enjoyed a brief stay above the $100 mark. As of 10:15am Eastern, NXST was priced at $90.45, up 1% from Tuesday.
Total Q2 television advertising revenue increased 18.1% to $319.8 million, including political revenue of $21.6 million and core advertising revenue of $298.2 million. “In total, our sales teams generated $20.7 million of second quarter new to television revenue, marking an 11.3% rise over the first quarter and a 4.5% rise over the comparable 2019 period,” Sook remarked.
Meanwhile, the third quarter is poised to be a big one for Nexstar’s news operation — and revenue diversification plan. Its News Nation is ramping up, and Nexstar is already doing dry runs ahead of its Sept. 1 rollout. News Nation, a prime-time national newscast on WGN America, is being pitched as a non-biased news-focused alternative to the political talk-dominant cable news channels available to U.S. consumers.
Then, there is the balance sheet, showing unrestricted cash of $664.6 million as of June 30 — up from $232.1 million at the close of 2019. Total funded debt came in at $8.04 billion, dipping from $8.49 billion. Nexstar’s total net leverage ratio at June 30 was 4.47x.
What sort of blemish, if any, could be seen for Nexstar? Payments for broadcast rights, thanks to the addition of the Tribune Media properties, rose to $49.11 million, from $13.81 million.
Nexstar owns, operates, programs or provides sales and other services to 196 television stations and related digital multicast signals reaching 114 markets or approximately 39% of all U.S. television households, reflecting the FCC’s reinstatement of the “UHF discount.”
It also owns WGN-AM 720 in Chicago.
