If one were to ask how a company could withstand an 82% drop in political dollars yet still show a profit in Q3, all they would need to do is review the financial results released Monday morning (11/6) by Gray Television.
The owner-operator of 100+ TV stations across the U.S. met its profit forecasts in strong fashion.In Q3, Gray swung to net income of $15.3 million (21 cents per share) from a Q3 2016 net loss of $213,000.
The results matched the predictions of three analysts surveyed by Zacks Investment Research.
Overall, revenue jumped to $218.98 million, from $204.49 million. But, less agency commissions, total revenue fell by 6%, to $218.98 from $233.8 million.
Operating expenses also increased, moving to $168.95 million from $144.02 million.
Meanwhile, Gray notes that its total advertising revenue for Q3 was near the high end of its guidance range. “In particular, our combined local and national advertising revenue increased by approximately $13.5 million, or 11%, in Q3 compared to the third quarter of 2016,” the company notes.
The Q3 net income was the highest-ever in a third quarter in Gray’s history. The Aug. 1 acquisition of WCAX-3 in the Burlington, Vt.-Plattsburgh, N.Y. market certainly aided Gray; the station is the default CBS affiliate for most of Quebec.
On Oct. 2, Gray extended and renewed its affiliation agreements for all 39 of its CBS affiliates, through Dec. 31, 2021.
A LOCAL LEADER
Gray’s revenue is driven by local dollars, and in Q3 2017 — just like one year ago — local dollars account for half of the company’s revenue streams. Local dollars came in at $110 million, compared to $102.18 million in the year-ago period.
National dollars now account for 14.2% of the total, up from 12.4%, and national jumped to $31 million, from $25.4 million.
Meanwhile, retransmission consent revenue — a thorny profit generator for those in the cable TV industry — jumped to $70.2 million from $51.1 million. Retrans fees now account for 32% of all revenue at Gray.
