GTN earnings
Operating Highlights (the respective 2022 periods reflect the “on-year” of the two-year political advertising
cycle):
• Revenue was $803 million, a decrease of 12% from the third quarter of 2022.
• Core Advertising Revenue was $363 million, an increase of 1% from the third quarter of 2022.
Gray Television, Inc.
Earnings Release for the three and nine-month periods ended September 30, 2023 Page 2 of 11
• Impairment charge of $43 million was related to the bankruptcy of Diamond Sports Group, LLC’s (“Diamond”) Atlantic Coast Conference (“ACC”) contract with our Raycom Sports subsidiary and its replacement with new ACC sports rights agreements with ESPN and the CW.
• Net loss attributable to common stockholders was $53 million, or $0.57 per share.
• Broadcast Cash Flow was $229 million, a decrease of 36% from the third quarter of 2022, due primarily to the
cyclical decrease in political advertising
GTN's Guidance:
Revenue:
o Core advertising revenue of $410 million to $414 million; up low single digit percentage increases
over the fourth quarter of 2022.
o Retransmission revenue of $362 million to $365 million; up low single digit percentage increases over
fourth quarter 2022.
o Political advertising revenue of $34 million to $35 million.
o Production company revenue of $30 million to $31 million.
o Total revenue of $854 million to $864 million.
Operating Expenses:
o Broadcasting expenses of $605 million to $610 million, including retransmission expense of
approximately $233 million and non-cash stock-based compensation expense of approximately $1
million.
o Production company expenses of approximately $26 million to $28 million.
o Corporate expenses of $35 million to $40 million, including non-cash stock-based compensation
expense of approximately $4 million.
Overall not a great earnings this quarter, but they're putting the pieces into play (e.g., local sports, retrans rev potential, political advertising next year) so I will continue to hold into next year as I targeted. It is good to see core advertising holding and when we move into the presidential races that should begin to increase revenue - this was a non-political year and if we compare just political earnings to Q3 2021 (also a non-political year) they have grown 34%.
Interest expense did impact them in this quarter as it took 14% of revenue.
They were still FCF positive in the quarter and long-term debt declined ~4%. They will pay the cash dividend of $0.08/s (payable Dec 29th).
No SEC documents yet so will dig into their 10-Q (plus still need to get to RYAM) when I can.
My price target remains $11-13/s for now.
-Sean |
