Mixed Signals At Gray Television: Q4 Sales Outperform Expectations Amid Advertising Shifts

Gray Television Inc GTN reported fourth-quarter fiscal 2023 sales that fell 19% Y/Y to $864.00 million, beating the analyst consensus of $863.31 million.

EPS loss of $(0.24) missed the consensus loss of $(0.16). 

Core Advertising Revenue in the quarter was $415 million, an increase of 2% Y/Y. Television stations’ core advertising revenue increased 2% Y/Y, and the automobile advertising category rose 16% Y/Y in the quarter. 

Total broadcasting expenses increased 6% Y/Y to $604 million. Operating income decreased to $113 million from $363 million a year ago.

Broadcast cash flow was $245 million, down by 49% Y/Y, primarily due to decreased political advertising.

In the fourth quarter, NBCUniversal began its lease at the Assembly Studios real estate complex in Atlanta, involving soundstages, offices, and additional facilities. Efforts are ongoing to enhance the value of this development’s undeveloped areas, with full construction expected by 2030. The project’s completion and infrastructure improvements in 2024 are projected to cost $52 million, offset by $31 million in expected incentive payments. 

CFO Transition: Also this week, the company announced a transition in its financial leadership: Chief Financial Officer Jim Ryan plans to retire after 2025, with Jeff Gignac, currently at Wells Fargo Securities, set to take over the CFO role in July 2024 after joining as Executive Vice President, Finance, in April. Ryan will assist Gignac and the executive team through his retirement.

Outlook: GTN expects first-quarter revenue of $810.00 million – $830.00 million versus the consensus of $874.98 million. 

The company projects core advertising revenue of $365.00 million – $375.00 million and broadcasting expenses of $585.00 million – $595.00 million for the quarter.

Price Action: GTN shares are trading lower by 2.646% at $7.74 premarket on the last check Friday.