Nexstar misses earnings expectations despite revenue growth

Increases in advertising and distribution revenue led to a 2.3% growth in revenue at Nexstar Media Group but still fell short of Wall Street’s expectations.

Revenue was up to $1.27 billion, which was up $29 million from the same quarter in 2023.

That figure missed analysts’ expectations of $3.65 earnings per share, with the company reporting $3.54, a 2.9% miss. 

Specifically, distribution revenue grew 5.5%, or $38 million, to $734 million, the company said, crediting the increase largely to “favorable” content distribution contract renewals. It specifically noted that growth of vMVPD subscribers was a key factor in the growth. MVPD subscribers continued to shrink, but resolving a retransmission agreement with one station and an MVPD offset those losses. 

The company also credited stations switching to The CW for helping increase revenue in this category. 

Distribution revenue includes carriage fees, retrans fees, affiliate fees and spectrum leasing.

Nexstar also saw growth in its ad revenue, which hit $522 million, a boost of 2.2%, or $11 million.

Political advertising, not surprisingly, was a big part of that, growing $37 million over the previous year to $45 million. That growth was able to offset a $24 million reduction in non-political ad revenue over 2023.

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Losses from The CW were also down $33 million for the quarter year-over-year.

“Nexstar delivered another period of solid financial results, building on our strong start to the year. Following a first quarter in which Nexstar generated record first-quarter distribution and total net revenue, we did it again, generating our highest-ever second-quarter distribution and total net revenue,” said Nextsar chairman and CEO Perry Sook in a statement.

“During the quarter, we continued executing on our plan at The CW, reducing operating losses by $33 million year-over-year and $83 million year-to-date as our organizational and programming changes are driving improved cash flows and the third consecutive quarter of ratings growth in primetime entertainment programming,” Sook added.