Tegna reported higher earnings in the second-quarter as subscription revenues hit a record high.
In order to make up for the drop in Tegna’s share price when the deal to sell the company to Standard General fell through, Tegna said it was committed to share buy backs, including an additional $325 million after third quarter earnings are reported.
Tegna also raised its dividend 20% to 11.375 cents a share to make its stock more attractive.
In May, Tegna shares traded at more than $21 a share. Tegna closed at $17.07 Wednesday.
“After terminating the merger agreement, we swiftly transitioned to an offensive strategy focused on performance, operating efficiency and delivering maximum value to our shareholders. During the second quarter, we successfully met the outlook for our key financial metrics, achieved a record second quarter for subscription revenue and saw sequential improvement in advertising and marketing services revenue driven by improving trends in key verticals such as automotive,” said Tegna CEO Dave Lougee
Second-quarter net income rose 52% to $200.1 million, or 92 cents a share, from $131.6 million or 49 cents a share a year ago.
Revenue fell 7% to $732 million. The company said the drop was preliminary because of a comparison to last year being an election year.
Subscription revenue rose 2% to $396 million, with rate increases offsetting subscriber declines.
Advertising and Marketing Services revenue was down 5% to $318 million. Tegna’s Premion advanced advertising unit lost a significant client last quarter, and the impact of that loss will be felt throughout 2023, the company said.
Tegna noted that its station streaming apps were added to Apple TV in June. Tegna has begun testing station streaming apps for Samsung, LG, Chromecast and additional platforms, which are expected to launch in the third quarter.
Looking ahead to the third quarter, Tegna said it expects to be disproportionately impacted by cyclical even-to-odd-year results due to the absence of $93 million high-margin political revenue reported in the third quarter of 2022.
The company said it is expecting revenues to be down by low double-digit percentages while operating expenses will be up by low single digits. Excluding programming, expenses will be down by low single digits.
