Nexstar Weathers Cyclical Political Ad Drop To Post Solid Q4 Results

deadline.com:

Nexstar Media Group, the No. 1 owner of local TV stations in the U.S., weathered the absence of political advertising in the fourth quarter to post better-than-expected results.Total revenue of $1.245 billion in the quarter ending December 31 slid almost 10% from the same period in 2020, but it beat Wall Street analysts’ consensus forecast.

Earnings per share also declined, to $6.19 from $7.97, but came in ahead of targets.Excluding political advertising revenue, net revenue gained 14% compared with the year-ago quarter.Distribution revenue increased a healthy 17% to $616 million, with the company crediting 2020 renewals with better terms and rate hikes offsetting ongoing pay-TV shrinkage.For the full year, revenue climbed 3% to a record $4.6 billion.

In addition to its local stations, Nexstar owns digital media assets and cable network NewsNation. It also has a lucrative 31% stake in the Food Network.In the company’s earnings release, CEO Perry Sook said the company has “excellent three-year visibility.” The current year will benefit from mid-term election ad spending, with 2023 seeing several renegotiated distribution deals kicking in for half of Nexstar’s subscriber base, and then 2024 bringing an expected political windfall.Nexstar is in talks with the owners of the CW, Paramount Global and WarnerMedia, about a potential acquisition.

The company already has the largest collection of CW stations in the U.S., which would give a logic to the purchase. The motivation that drove CBS and Time Warner to join forces in launching the network in 2006 has also shifted over the years, and both network parents are pouring resources into streaming.Sook said he expects the company to hit its free cash flow targets in 2022, which