“An excellent start to 2024.” That’s the summation from Perry Sook, founder and Chairman/CEO of Nexstar Media Group, as he pointed to outperformance for the nation’s No. 1 owner of broadcast TV stations, and the parent of The CW Network, the NewsNation cable news network, and spoken word radio leader WGN-AM in Chicago.
Indeed, Nexstar’s Q1 2024 net revenue were in line with analysts’ expectations, thanks to “record” dollars during the three-month period.
Some 9 financial analysts were polled by Yahoo! Finance, and this put the consensus estimate for revenue at $1.29 billion in Q1 for Nexstar.
Net revenue came in at $1.284 billion, rising from $1.257 billion, as net income attributable to Nexstar Media Group rose to $175 million ($5.16 per diluted share) from $111 million ($2.97).
Reduced operating expenses helped, as they totaled $1 billion in Q1, down from $1.05 billion.
Adjusted EBITDA rose to $542 million from $496 million, while adjusted Free Cash Flow advanced to $403 million from $377 million.
Helping Nexstar in Q1 are $40 million of gross proceeds from the sale of its ownership interest in Broadcast Music, Inc. (BMI).
With Nexstar’s total net leverage ratio at the end of Q1 coming in at 3.73x, total debt now totals $6.81 billion, down from $6.84 billion.
Pacing is down low-single-digits for advertising in Q2, Nexstar shared on its earnings call held Wednesday morning, with local digital advertising growth helping stem the challenges seen at linear properties across the industry.
Weakness in Nexstar’s advertising revenue during the first quarter was offset by distribution revenue — a.k.a. carriage fees tied to retransmission consent agreements. In Q1, distribution revenue climbed to $761 million from $728 million, reaching an all-time quarterly high for Nexstar. The gains were linked to contract renewals reached in 2023 “on terms favorable” to Nexstar.
It also noted the return of partner stations at “one MVPD” in January.
On January 24, that close partner Mission Broadcasting, reached a new accord with direct broadcast satellite service Dish, ending a long battle between the two entities.
While Nexstar has significant challenges ahead regarding FCC matters linked to its cozy relationship with Mission, and the operation of WPIX-11 in New York, and the company is effectively barred from providing funding to Mission for the acquisition of WADL-38 in Detroit from Adell Broadcasting, investors appear to be pleased with the revenue improvements seen at Nexstar.
As of 10:25am Eastern, “NXST” was up by 7.3% to $178.52.
