TEGNA’s TGNA third-quarter 2024 non-GAAP earnings of 94 cents per share beat the Zacks Consensus Estimate by 13.25% and increased 141.02% on a year-over-year basis.

TGNA’s earnings beat the Zacks Consensus Estimate in three of the four trailing quarters, while missing once, with the average surprise being 3.22%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Revenues increased 13% year over year to $806.8 million, beating the Zacks Consensus Estimate by 1.82%. The year-over-year increase was primarily due to strength in political advertising dollars and positive growth in subscription and advertising and marketing services revenues.

Following third-quarter earnings, TGNA shares were down 0.36% in after-hours trading. TGNA’s shares have gained 26.2% year to date (YTD), outperforming the Zacks Computer & Technology sector’s return of 7.4%.

During the third quarter, TEGNA returned more than $90 million of capital to shareholders with $70 million of share repurchases, representing 4.9 million shares, and paid $21 million in dividends.

Quarter in Details

Advertising and Marketing Services revenues (38.78% of total revenues) increased 0.17% year over year to $312.9 million, primarily due to increased advertising related to the Summer Olympic Games, partially offset by political crowding out.  

Subscription revenues (44.1% of total revenues) decreased 6% year over year to $356 million due to a decline in subscribers, partially offset by contractual rate increases.

Political revenues (15.6% of total revenues) were $126 million, a new third-quarter record, up from $11.6 million reported in the year-ago period. Full-year political advertising revenues through Election Day totaled $375 million. 

Other revenues (3% of total revenues) were $11 million, up 0.3% year over year.

Non-GAAP adjusted EBITDA increased 62.4% year over year to $269.5 million. Adjusted EBITDA margin expanded 1014 basis points (bps) from the year-ago period to 33.4%.

Non-GAAP operating expenses (70.2% of total revenues) of $566 million were down 1.6% year over year. This decrease was due to a reduction in programming expenses and core cost initiatives.

Non-GAAP operating income increased 75% year over year to $223 million. The operating margin expanded 1052 bps from the year-ago period to 29.81%.

Balance Sheet & Cash Flow

As of Sept. 30, 2024, total cash and cash equivalents were $536 million. 

Total debt was $2.55 billion, and net leverage was 2.8 times as of Sept. 30, 2024.

Adjusted free cash flow in the third quarter was $211.4 million compared with $121 million reported in the previous quarter.

Outlook

For the fourth quarter of 2024, Tegna expects total GAAP revenues to increase 19-21%. 

Non-GAAP operating expenses are estimated to increase 1-3% in the fourth quarter 2024.

For the full-year 2024, TGNA expects the net leverage ratio to be below 3X. The company expects 2024/2025 two-year adjusted FCF between $900 million and $1.1 billion.

Zacks Rank & Key Picks

TEGNA carries a Zacks Rank #3 (Hold) at present.

Shares of TGNA have gained 26.3% year to date compared with the Zacks Consumer Discretionary sector’s increase of 7.4% in the same time frame.

Some better-ranked stocks from the broader sector that investors can consider are Madison Square Garden Entertainment Corp. MSGE, Carnival CCL and Flexsteel Industries FLXS, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of MSGE have gained 35.5% year to date. The Zacks Consensus Estimate for MSGE’s fiscal 2025 revenues is pegged at $978.29 million, indicating a year-over-year increase of 1.98%. The consensus mark for earnings is pegged at $1.66 per share, which has gained 2 cents over the past 30 days.

Shares of Carnival have gained 27.9% year to date. The Zacks Consensus Estimate for CVL’s 2024 revenues is pegged at $25.19 billion, indicating a year-over-year increase of 16.63%. The consensus mark for earnings is pegged at $1.31 per share, which has increased 2.3% over the past 30 days.

Shares of Flexsteel have gained 217.2% year to date. The Zacks Consensus Estimate for FLXS’ fiscal 2025 revenues is pegged at $433.08 million, indicating a year-over-year increase of 4.92%. The consensus mark for earnings is pegged at $3.25 per share, which has increased 8.3% over the past 30 days.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Carnival Corporation (CCL) : Free Stock Analysis Report

Flexsteel Industries, Inc. (FLXS) : Free Stock Analysis Report

TEGNA Inc. (TGNA) : Free Stock Analysis Report

Madison Square Garden Entertainment Corp. (MSGE) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research