Nexstar Media Group Inc. on Aug. 7 reported a decline in second-quarter revenues as gains in retransmission-consent fees were blunted by a cyclical drop in political advertising.
While local ad revenue inched up to $199.3 million from $198.6 million in the second quarter of 2018, national revenue dropped 4.6% to $68.3 million as total spot ad revenue slipped 1% to $267.6 million. Political ad revenue plummeted 90% year over year to $3.16 million, down from the $31.6 million that Nexstar tallied during the second quarter of 2018, just ahead of that year's U.S. midterm elections.
Total ad sales revenue declined 10.3% to $270.8 million from $301.8 million in the second quarter of 2018. For the full year, Nexstar expects to generate single-digit growth in nonpolitical TV advertising revenue, when compared with 2018.
Retransmission-consent fee revenue grew 13.8% year over year to $314.3 million from $276.3 million.
Nexstar's consolidated net revenue dipped 1.7% to just over $649.0 million from $660.3 million a year earlier. Excluding the impact of political advertising, the company said second-quarter revenues would have grown at a 2.7% clip.
Net income available to the company was $68.0 million, or $1.42 per share, down from $87.7 million, or $1.86 per share, in the second quarter of 2018.
The S&P Global Market Intelligence consensus EPS estimate for the second quarter was $1.40 on a GAAP basis and $1.33 cents on a normalized basis.
The U.S. Department of Justice on July 31 granted conditional approval for Nexstar's pending purchase of Tribune Media Co., which would make the combined entity the largest station operator in the nation. Nexstar executives on Aug. 7 reiterated their view that the deal would close in the current quarter.
"We are now waiting for [Federal Communications Commission] approval and court approval of the DOJ settlement and certain other customary closing conditions," Nexstar Chairman, President and CEO Perry Sook told analysts on the company's August 7 earnings call.
To meet regulatory requirements for the Tribune deal, Nexstar is selling 21 stations in 16 markets, divestitures that will generate gross proceeds of $1.36 billion. Those funds will be used for the Tribune acquisition and to reduce debt.
Regarding the lingering blackout of Nexstar-owned stations on AT&T Inc.'s distribution platforms, Sook said progress is being made as the companies continue to trade proposals. He did not provide specifics, stating that Nexstar will not negotiate publicly. AT&T Chairman and CEO Randall Stephenson said earlier that Nexstar was seeking significant increases for assets it did not own, presumably alluding to the Tribune stations and cable network WGN America (US), assets that are part of Nexstar's pending acquisition of Tribune.
More than 120 Nexstar stations in 97 markets have been dark to DIRECTV, DIRECTV NOW and U-verse subscribers since July 4.