Nexstar Media Group reported lower profits despite record revenues as losses at The CW and higher news expenses weighed down earnings.
The acquisition of The CW reduced Nexstar’s earnings before interest, taxes, depreciation and amortization by $75 million.
Net income fell to $111 million, or $2.97 million, from $252 million, or $6.15 a share, a year ago.
The company said the results include losses at The CW and the impact of lower core and political ad revenues. The company had increased expenses at its NewsNation network and local stations’ news operations, as well as lower income from its stake in Food Network.
Revenues rose 3.9% to a record $1.26 billion.
Total advertising revenues fell 6% to $425 million in a nonelection year. Core advertising revenues — excluding political spending — decreased 2.6% to $417 million.
Distribution revenue rose 9% to $728 million and digital revenue increased 16.5% to $92 million.
“Nexstar’s first quarter financial results once again outperformed consensus expectations across all key financial metrics,” CEO Perry Sook said. “All-time high quarterly distribution revenue and the benefit of The CW acquisition more than offset the cyclical year-over-year decline in political and Olympic advertising, resulting in record first-quarter net revenues for the company.”
Sook said Nexstar was making progress on its plan for The CW with key personnel appointments, further overhead cost reductions and new programming additions, “including our exclusive multiyear partnership with LIV Golf.’
“We are excited about the opportunities in front of us and remain confident in our near and long-term strategies, the quality of our assets, the strength of our financial position and our ability to create new value for shareholders,“ Sook said. “Nexstar’s portfolio of local and national media assets provide nationwide reach with local activation at a greater scale than any other broadcast network owner, creating a differentiated and highly attractive multimedia platform for advertisers and brands seeking direct consumer engagement in an increasingly fragmented marketplace.
“Looking forward, we expect 2023 will continue to benefit from recently renegotiated distribution contracts representing more than half of our subscribers at the end of last year, while 2024 will see strong upside from presidential election-year political advertising and additional distribution contract renewals later this year,” he said.
