TEGNA (TGNA) to Report Q1 Earnings: What's in the Cards?

 | May 05, 2020 06:22AM ET

TEGNA (NYSE:TGNA) TEGNA Inc. Quote

Let’s see how things are shaping up for this announcement.

TEGNA Reports Strong Interim Results

TEGNA reported its preliminary first-quarter 2020 results on Apr 20. Revenues are expected to be $684 million, up 32% year over year and in line with the company’s prior guidance, driven by acquisitions and steady growth in subscription revenues as well as political advertising spending. Excluding political advertising, quarterly revenues are expected to be up 24% year over year.

Non-GAAP diluted earnings are expected to be 43 cents per share, up $48 year over year. Adjusted EBITDA is expected to be $212 million, up 39% year over year, reflecting solid contributions from new as well as existing stations and benefits from the on-going cost-containment efforts.

Factors to Consider

TEGNA’s preliminary first-quarter results reflect benefits of a stable subscriber base. Moreover, the company’s acquisitions of local TV stations comprising the Big Four affiliates are likely to have aided the top line in the to-be-reported quarter.

Further, renewal of CBS and Fox affiliate agreements is expected to have boosted revenues. Apart from higher political advertising spending that might have benefited the top line, solid retransmission rates are expected to have fueled TEGNA’s growth.

Further, we believe that climbing viewership of local news and media consumption due to lockdowns and shelter-in-place guidelines bodes well for the company’s first-quarter results.

However, lower advertising spending due to the coronavirus outbreak is expected to have affected Advertising & Marketing services, which accounts for more than 55% of TEGNA’s revenues.

Additionally, increasing programming fees and investments in content and digital are expected to have weighed on margins in the to-be-reported quarter.

What Our Model Indicates

Per the Zacks model, the combination of a positive Zacks Investment Research

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Written By: Zacks Investment Research

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