It has been about a month since the last earnings report for TEGNA Inc. (TGNA). Shares have added about 0.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is TEGNA Inc. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
TEGNA Q1 Earnings Beat Estimates, Revenues Rise Y/Y
TEGNA’s first-quarter 2022 non-GAAP earnings of 59 cents per share beat the Zacks Consensus Estimate by 3.51% and increased 13.5% on a year-over-year basis.
Revenues increased 6.5% year over year to $774.3 million but missed the consensus mark by 0.51%. The year-over-year upside can be attributed to record first-quarter advertising and marketing services revenues and political revenues.
In February, Tegna entered into a definitive agreement to be acquired by an affiliate of Standard General for $24 per share in cash and become a private company.
The transaction, which the Tegna Board unanimously approved, has an equity value of around $5.4 billion and an enterprise value of $8.6 billion, including the assumption of debt.
With the acquisition in place, Tegna will become the United States’ largest minority-owned broadcast group.
The acquisition is currently on track and is expected to be completed in the second half of 2022, subject to closing conditions.
Quarter in Detail
Subscription (50.6% of revenues) revenues inched up 1.3% year over year to $391.7 million due to rate increases.
Advertising and Marketing services (45.8% of revenues) revenues increased 9.9% year over year to $354.7 million, demonstrating significant broad-based strength across advertising categories.
Political (2.3% of revenues) revenues amounted to $18 million, up 90.5% year over year
Other revenues (1.3% of revenues) were $10 million, up 24.7% year over year.
Non-GAAP adjusted EBITDA increased 8.2% year over year to $249.6 million. Adjusted EBITDA margin expanded to 32.2% from 31.7% in the year-ago quarter.
Non-GAAP operating expenses (71.7% of revenues) of $554.8 million were up 5.1% year over year, driven by investments in growth initiatives such as Premion.
Non-GAAP operating income increased 10.1% year over year to $219.3 million. The operating margin expanded to 28.3% from 27.4% in the year-ago quarter.
Balance Sheet & Cash Flow
As of Mar 31, 2022, total cash was $43 million compared with $57 million as of Dec 31, 2021.
Total debt amounted to $3.1 billion and net leverage was 3.03 times as of Mar 31, 2021.
Free cash flow in the first quarter was $182 million compared with $189 million reported in the previous quarter. The uptick can be attributed to growth in advertising and marketing services and political revenues.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 7.69% due to these changes.
At this time, TEGNA Inc. has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, TEGNA Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
TEGNA Inc. belongs to the Zacks Broadcast Radio and Television industry. Another stock from the same industry, Roku (ROKU), has gained 11.4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2022.
Roku reported revenues of $733.7 million in the last reported quarter, representing a year-over-year change of +27.8%. EPS of -$0.19 for the same period compares with $0.54 a year ago.
Roku is expected to post a loss of $0.76 per share for the current quarter, representing a year-over-year change of -246.2%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.5%.
Roku has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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