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TEGNA Q3 Earnings Beat Estimates by a Penny, Surges Y/Y

TEGNA Inc.TGNA , the media conglomerate, reported third-quarter 2015 adjusted earnings of 37 cents a share that beat the Zacks Consensus Estimate by a penny and surged 27.6% from 29 cents recorded in the year-ago quarter. The year-over-year increase was attributed to sturdy results in the Digital Segment.

On a GAAP basis, the company posted quarterly earnings of 39 cents a share, up substantially from 22 cents delivered in the prior-year period.

TEGNA, which carries a Zacks Rank #3 (Hold), reported total revenue of $807.1 million that grew 18.5% from the prior-year quarter but fell short of the Zacks Consensus Estimate of $827.3 million. Top-line growth was primarily backed by improved Digital revenue, partially offset by a decline in Broadcasting revenue.

Adjusted EBITDA came in at $266.6 million, reflecting an increase of 22.2%, whereas adjusted EBITDA margin expanded 100 basis points to 33%. On a pro forma basis, adjusted EBITDA increased 4.5%.

Delving Deeper

The Digital segment 's revenue surged 71.6% to $351.1 million, driven by robust results at Cars.com. On a pro forma basis, revenue grew 5.3% on the back of revenue increase in mid-twenties at Cars.com. The segment's pro forma operating income came in at $72.4 million, up 42% from the year-ago quarter.

Direct sales, on a pro forma basis, jumped 11.4%, National revenue grew 13.8%, while Affiliate revenue increased 52.7%. On a constant currency basis, CareerBuilder revenue declined 3.7%. Revenue from Human Capital Software Solutions soared 24.1% in the quarter under review.

The Broadcasting segment 's revenue fell 2.4% year over year to $406.4 million due to the absence of $33.9 million of net political spending that had contributed to the segment in the year-ago quarter. However, the quarter under review gained from increased retransmission and online revenues as well as higher core advertising. Retransmission revenue increased 18.6% to $109 million, while digital revenue improved 13.1% to $29.4 million. Core advertising grew slightly over 1% in the quarter. Adjusted Broadcasting operating income tumbled 11.6% to $158.6 million.

Management now expects fourth-quarter 2015 television revenue to decline in the mid-to-high single digits due to tough year-over-year comparisons, as the year-ago quarter had gained $92 million from political advertising. TEGNA anticipates growth in core advertising in the fourth quarter.

Other Financial Aspects

The company ended the quarter with total cash of $117.8 million and long-term debt of $4.47 billion. It generated net cash flow from operating activities of $183.8 million and free cash flow of $163.9 million during the quarter. Also, the company bought back approximately 4.9 million shares for $125.5 million.

Stocks to Consider

Better-ranked stocks in the same space are Gray Television, Inc. GTN sporting a Zacks Rank #1 (Strong Buy), and Salem Media Group, Inc. SALM and The E. W. Scripps Company SSP , both carrying a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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