Nexstar Media Shares Slip After Q2 Results Fall Short Of Expectations

Nexstar Media Group, Inc NXST reported a second-quarter FY23 net revenue of $1.24 billion, a slight decrease of 0.4% year-over-year, missing the consensus of $1.25 billion.

Revenues from Television Advertising fell 17.4% Y/Y to $413 million, comprising Core Advertising revenue that fell 2.2% Y/Y to $404 million and Political Advertising revenue that fell 89.7% to $9 million.

Distribution revenue rose 7.7% Y/Y to $696 million. Digital revenue expanded 11.4% Y/Y to $98 million.

Income from operations fell 46.4% Y/Y to $179 million, and the operating margin contracted to 14.4% from 26.8% in 2Q2.

EPS was $2.64 (-52.5% Y/Y), missing the consensus of $2.88. 

Adjusted EBITDA margin contracted by 1,258 bps to 26.7%. Nexstar Media generated $100 million in free cash flow.

Excluding The CW Network, Q2 Adjusted EBITDA was $405 million, representing a 34.6% margin, and free cash flow was $131 million.

Perry Sook, Nexstar's Chairman and CEO commented, "Looking forward, we expect the balance of 2023 will continue to reflect our ability to outperform the overall advertising market and benefit from renegotiated distribution contracts representing more than half of our subscribers at the end of 2022, partially offset by the ongoing impact of negotiations with certain distribution partners." 

Price Action: NXST shares traded lower by 3.83% at $177.07 on the last check Tuesday.