“Today, once again, we reported a strong finish to 2022,” Gray Television Chairman and co-CEO Hilton Howell Jr. said as he opened the company’s Q4 and full-year earnings call on Friday morning.
Record political advertising in a mid-term cycle helped Gray, in particular, across 2022, with some $515 million coming to the broadcast television company. This exceeded 2018’s full-year political dollars by 232% on an as-reported basis.
How did Gray perform in the final three months of 2022?
Total revenue grew to $1.072 billion, rising from $721 million, as net income jumped to $186 million ($1.88 per diluted share) from $29 million ($0.17).
The results easily beat the Zacks Consensus Estimate on EPS, as analysts they polled anticipated earnings per share of $1.73. Revenue came in 2.38% ahead of the estimate provided by analysts polled by Zacks.
While Class A shares were up in Friday’s trading, GTN was swept up in overall market declines, slipping 2.4% to $12.43 as of 11:10am Eastern.
How big were the political dollars in Q4 ’22? The total was $255 million, up from $20 million in the final three months of 2021.
Then, there is retransmission consent revenue. In Q4, it rose by 20% year-over-year to $353 million, from $294 million. But, in the fourth quarter of 2022 retrans dollars comprised 1/3 of the total revenue. In Q4 2021, it was 41%. Five percent growth in retransmission revenue was seen on a full-year basis, Kevin Latek, the company’s EVP and Chief Legal & Development Officer, shared on the earnings call.
Core revenue increased to $406 million from $359 million in Q4, and increased to $1.5 billion from $1.19 billion on a full-year basis.
Broadcast Cash Flow increased to $484 million from $311 million on a non-GAAP combined historical basis.
Gray’s total net leverage stands at 5.41x.
Looking at how the first quarter of 2023 is shaping up, Gray Television provided the following guidance:
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Revenue:
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Total Core Revenue of $350 million to $360 million.
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In the three months ended March 31, 2023, we anticipate approximately $6 million of net revenue from the broadcast of the Super Bowl on our 27 FOX channels compared to an aggregate of $13 million of net revenue relating to the broadcast of the Winter Olympics and the Super Bowl on our 56 NBC channels during the three months ended March 31, 2022.
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Retransmission revenue of $387 million to $393 million.
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Political revenue of $2 million to $3 million.
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Production company revenue of $20 million to $21 million.
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Total revenue of $777 million to $796 million.
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Operating Expenses:
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Broadcasting expenses of $560 million to $565 million, including retransmission expense of approximately $235 million and non-cash stock-based compensation expense of approximately $1 million.
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Production company expenses of approximately $23 million to $24 million.
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Corporate expenses of $30 million to $33 million, including non-cash stock-based compensation expense of approximately $4 million.
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GRAY BOARD SAYS YES TO DIVIDEND
