TEGNA 2025 Q1 Earnings Misses Targets with Net Income Down 69%

TEGNA (TGNA) reported its fiscal 2025 Q1 earnings on May 8th, 2025. The company posted a 5% decline in total revenue, reaching $680 million, primarily driven by decreased political advertising revenue and lower advertising and marketing services (AMS) revenue. Despite the challenging macroeconomic conditions, TEGNA reaffirmed its two-year Adjusted Free Cash Flow guidance between $900 million and $1.1 billion. The company maintains a cautious yet optimistic outlook as it navigates the evolving media landscape.

Revenue
TEGNA's total revenue for the first quarter of 2025 decreased by 4.8% compared to the previous year, totaling $680.05 million. Distribution revenue contributed $379.56 million, while Advertising & Marketing Services accounted for $286.40 million. Political revenue saw a significant drop, generating only $3.62 million, and other revenue streams brought in $10.48 million.

Earnings/Net Income
TEGNA's earnings per share (EPS) fell dramatically by 66.0% to $0.36, compared to $1.06 in the previous year's first quarter. The company's net income declined 69.2%, amounting to $58.31 million, down from $189.26 million in 2024 Q1. This performance reflects a challenging quarter for the company.

Post-Earnings Price Action Review
Over the past five years, a strategy of purchasing TEGNA shares following a quarter-over-quarter revenue decline and holding them for 30 days has resulted in an 86.29% return. This is slightly below the benchmark return of 92.56%. The strategy exhibited a Sharpe ratio of 0.42, indicating moderate risk-adjusted returns, and experienced a maximum drawdown of -46.04%, highlighting significant volatility. Despite these challenges, the strategy's overall volatility stood at 31.80%, suggesting that while the returns were decent, investors faced considerable fluctuations. This performance review underscores the complexities involved in investing in TEGNA, particularly during periods of revenue contraction.

CEO Commentary
"We're making important progress on the key initiatives that are shaping TEGNA's future," said Mike Steib, CEO. He acknowledged the volatile macro environment but emphasized the company's focus on execution and reinventing service delivery to local communities. Steib noted the importance of leveraging TEGNA's industry-leading brands, top talent, and strong balance sheet, positioning the company well to capitalize on opportunities across both linear TV and digital platforms.

Guidance
TEGNA reaffirms its two-year Adjusted Free Cash Flow guidance for 2024/2025. Despite the current challenges, the company is committed to maximizing opportunities in the evolving media landscape, maintaining a cautious yet optimistic outlook as it navigates the cyclical impacts of advertising revenue and focuses on strategic investments.

Additional News
TEGNA recently announced key leadership appointments, with Melissa Zimyeski named Vice President of Product and Mat Yurow as Vice President of Growth. These new roles aim to enhance TEGNA's consumer digital products and drive revenue and audience growth across digital platforms. Additionally, TEGNA has secured local team rights across major sports leagues, including the NBA, WNBA, NHL, and MLB, further expanding its content offerings. The company continues to enhance its advertising capabilities with Premion’s expanded tools and partnerships, improving campaign execution and optimization across multiple channels. These strategic moves are part of TEGNA's ongoing efforts to strengthen its market position and service delivery.