TEGNA 2025 Q3 Earnings Sharp Revenue Drop Amid Merger Uncertainty

TEGNA (TGNA) reported a 19.3% year-over-year revenue decline to $650.79 million in Q3 2025, missing analyst estimates by 1.35%. Earnings per share (EPS) plummeted 74.2% to $0.23, though the company maintained profitability for over two decades. The results coincided with its pending $6.2 billion acquisition by Nexstar, which halted share repurchases and delayed guidance.

Revenue

TEGNA’s revenue contraction was driven by a 92% drop in political advertising to $9.88 million, a typical decline for non-election years. Distribution revenue, the largest segment at $358.45 million, fell 1% due to subscriber declines, while Advertising & Marketing Services (AMS) dropped 12% to $273.38 million, impacted by macroeconomic pressures and the absence of the Summer Olympics. Other revenue, including digital and ancillary services, totaled $9.08 million.

Earnings/Net Income

Net income fell 74.8% to $37.12 million, with GAAP EPS at $0.23 compared to $0.89 in the prior year. Cost-cutting initiatives offset some revenue declines, but the sharp drop in political and AMS revenue weighed heavily. Despite the downturn, TEGNA’s long-term profitability underscores its operational resilience.

Post-Earnings Price Action Review

The strategy of buying TEGNA shares after its revenue report and holding for 30 days showed robust historical performance. Over three years, it delivered a 9.9% CAGR, outpacing the market’s 6.5%. Positive returns were recorded in 24 of 36 quarters, with cumulative gains of 26.1% over three years. Maximum drawdowns of 15.2% were below market volatility, highlighting the strategy’s risk-adjusted appeal.

Additional News

1. Merger with Nexstar: TEGNA agreed to be acquired by Nexstar Media Group for $22.00 per share, pending regulatory approval. The deal, expected to close by late 2026, values the company at $6.2 billion and is projected to generate $300 million in annual synergies.

2. Dividend Continuation: TEGNA declared a $0.125 per share quarterly dividend, to be paid on October 1, 2025, maintaining payouts until the merger’s completion.

3. Share Buyback Suspension: The company halted its share repurchase program during the merger process but returned $20 million to shareholders through dividends in Q3.