TEGNA Inc. Reports Strong Q2 2023 Results and Launches New $325 Million Share Repurchase Program
Buybacks
August 4, 2023
TEGNA Inc., a leading media company, has recently released its financial results for the second quarter of 2023. The company reported various key metrics, including total revenue, subscription revenue, and advertising trends. Additionally, TEGNA has revealed plans for a new share repurchase program aimed at returning accumulated capital to shareholders. Let's delve into the details.
In the second quarter of 2023, TEGNA achieved total company revenue of $732 million, a decrease of seven percent compared to the previous year. This decline was primarily due to the reduction of political revenue resulting from the mid-term election cycle in the prior year. However, the company's subscription revenue reached a record high of $396 million, up two percent year-over-year, driven by contractual rate increases, partially offset by subscriber declines.
On the advertising and marketing services (AMS) front, TEGNA reported revenue of $318 million in the second quarter, which was down five percent year-over-year. Despite this decline, there was sequential improvement compared to the first quarter, especially in the automotive advertising sector, which showed strong year-over-year growth for the fourth consecutive quarter.
Based on an ongoing review of capital allocation priorities and after considering shareholders' feedback, TEGNA's Board of Directors approved a second accelerated share repurchase (ASR) program worth $325 million. This program is expected to commence after the company reports its third-quarter earnings in early November. The decision to initiate this ASR program reflects TEGNA's commitment to returning capital to shareholders, as demonstrated by their previous $300 million ASR program and a 20 percent increase in regular quarterly dividends earlier in the year.
With this new ASR program, TEGNA is taking significant steps to reduce its outstanding shares. When combined with the previous ASR program and the settlement of the merger termination fee, the company will have committed over three-quarters of a billion dollars in share repurchases by the end of March 2024, representing more than twenty percent of the shares outstanding prior to these actions.
TEGNA's Board of Directors also declared a regular quarterly dividend of 11.375 cents per share, payable on October 2, 2023. This dividend reflects a 20 percent increase compared to the previous quarter and marks a remarkable 63 percent growth in total dividend payout since March 2021. The dividend increase aligns with the company's strategy to enhance shareholder value and maintain a healthy financial position.
Dave Lougee, President, and CEO of TEGNA Inc., expressed his satisfaction with the company's performance during the second quarter. He highlighted the success in meeting financial outlooks, achieving a record high in subscription revenue, and witnessing improved advertising and marketing services revenue, particularly in the automotive sector. Lougee also emphasized TEGNA's commitment to returning accumulated capital to shareholders and its dedication to fostering diverse talent within the industry.
TEGNA expects the third quarter of 2023 to be disproportionately impacted by even-to-odd year cyclical results, as there will be no high-margin political revenue as reported in the third quarter of 2022.
Regarding full-year 2023 guidance, the company anticipates achieving a net leverage ratio below 3x, reflecting the effects of the new ASR program scheduled to commence in November.
TEGNA has been actively expanding its reach and offering innovative services to its audience. Recently, the company launched Apple TV streaming apps for all its stations, generating a significant increase in streaming minutes. Additionally, Premion, TEGNA's advertising arm, has made strides in the streaming TV advertising space, delivering new advertiser innovations and earning industry recognitions.
TEGNA's VERIFY, a national brand combating disinformation, has seen substantial growth in its online presence and viewership. Moreover, the Locked On Podcast Network, owned by TEGNA, achieved a record 24 million monthly audio downloads and video views.
Lastly, TEGNA has made notable strides in promoting diversity and inclusion within its organization. The company's Producer-In-Residence program continues to develop talent, with approximately 80 percent of participants being promoted to regular producer roles after completing the program. TEGNA also supports journalists from diverse backgrounds through various grants and programs.
TEGNA Inc.'s second-quarter results show the company's resilience in navigating industry trends. With its commitment to returning capital to shareholders and dedication to fostering diverse talent, TEGNA continues to demonstrate strong financial performance and strategic growth. As the company moves forward, its innovative services and engagement with its audience position it favorably in the dynamic media landscape.
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