Nexstar, the largest TV station group, got a boost from midterm political ad spending as well as a rise in distribution and digital revenue in the second quarter.
The company reported net income of $226.5 million, a rise of 13.4%, in the period ended June 30. Revenue rose to $1.25 billion, up 10%, from the same period a year earlier. The results beat analysts consensus estimates, as did earnings per share.
“Our results benefitted from strong year-over-year growth in political advertising, distribution, and digital revenues,” said Perry Sook, the company’s chairman and chief executive officer.
Nexstar has been in the midst of expansion of its NewsNation, formerly WGN. It’s up to 60 hours a week of original content, with the recent announcement that former CNN host Chris Cuomo will join its primetime line up in the fall.
Nexstar is said to be in the process of buying a controlling stake in the CW from its parents Paramount Global and Warner Bros. Discovery. The Nexstar board just extended Sook’s employment agreement through March 31, 2026.
Political advertising revenue jumped to $86.7 million, from $8.5 million in the same period last year. Core advertising revenue dropped 2.5% to $413 million. Nexstar attributed this decline to drops in categories including insurance, automotive, direct response, government spending related to the COVID-19 pandemic and packaged goods. The company said that was offset by solid numbers for entertainment and home repair/manufacturing, as well as related categories such as carpet and floor covering and air conditioning/heating and fast food and restaurants. Overall, total TV ad revenue rose 15.7% to almost $500 million.
Nexstar also saw growth in digital revenue, 20.2% to 88.2 million, due to increases in advertising and agency services business, as well as the impact of its purchase of The Hill in 2021.
Distribution revenue rose 4.7% to $646.1 million, reflecting the renewal of distribution agreements last year on better terms. That was partially offset by losses of multichannel video subscribers.
“We continue to have solid three-year visibility on our growth trajectory, given the expected continuation of strong political advertising for the 2022 mid-term and 2024 presidential election cycles and the renewals of distribution agreements in 2022 and 2023 representing the substantial majority of our subscribers,” Sook said in a statement.