Nexstar Media Misses Q3 Earnings On Sharp Decline In Television Advertising Business

Nexstar Media Group Inc NXST reported a third-quarter FY23 net revenue decline of 10.8% Y/Y to $1.13 billion, missing the consensus of $1.17 billion.

Revenues were impacted by a decline in cyclical political advertising and the temporary removal of stations from an MVPD related to contract negotiations.

Revenues from Television Advertising fell 22.5% Y/Y to $410 million, comprising Core Advertising revenue that fell 2.3% Y/Y to $391 million and Political Advertising revenue that fell 85.3% Y/Y to $19 million.

Distribution revenue declined 6.7% Y/Y to $598 million, and Digital revenue rose 15.1% Y/Y to $99 million.

Income from operations fell 73.6% Y/Y to $94 million. Adjusted EBITDA margin contracted to 20.8% from 38.7% a year ago. 

EPS was $0.70, missing the consensus of $1.27. Nexstar Media generated $100 million in free cash flow.

Excluding the CW Network, third-quarter revenue was $1.08 billion, adjusted EBITDA was $294 million, representing a 27.2% margin and free cash flow was $136 million.

Also Read: Nexstar's Potential Upside Amid Streaming Disparities: Analyst Take On Advertising and Retransmission

The company returned $246 million to shareholders through repurchases worth $199 million and quarterly cash dividend payments of $47 million.

NXST currently has more than $700 million worth of shares remaining under its current repurchase authorization.

“We continue to be bullish about Nexstar’s future and the many exciting, near- and long-term organic growth opportunities for our business. Looking forward, we expect the balance of 2023 and the full year 2024 to benefit from recently renegotiated distribution contracts," said Perry A. Sook, chairman and CEO. 

"In 2024, Nexstar will realize upside from presidential election year political advertising, reduced losses related to the CW Network and an improving economic environment.”

NXST Price Action: Nexstar shares are trading lower by 3.15% at $146.69 at publication Wednesday.

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