Tegna has its sights set on consolidation following a second quarter during which the company’s revenues from continuing operations grew 2.6%.
The company’s media segment revenue grew 5% primarily driven by new initiatives and a “substantial increase in subscription revenue.”
Tegna has renamed its retransmission revenue category as a subscription to “better reflect the future changes in that revenue stream, including the distribution of TEGNA stations on OTT streaming services.”
The year-over-year revenue growth came for Tegna despite declines in advertising. Overall, ad revenue was down 5.6% to about $296 million. But subscription revenue shot up 23.7% to $180 million.
Net income from continuing operations was $49 million.
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Tegna’s latest quarter arrives on the heels of the company’s successful divestiture of Completed successful digital assets Cars.com for $650 million and CareerBuilder for gross proceeds of $250 million in cash along with a retained 12% ownership stake and two board seats. Going forward, Tegna will report its small remaining digital business as part of its media segment.
Looking ahead, Tegna CEO Dave Lougee liked his company’s positioning for potential M&A.
"We believe industry consolidation in a changing regulatory environment presents a compelling opportunity for TEGNA. Our track record in broadcast operations, along with our scale and financial firepower, uniquely positions us to play an active role in vertical and horizontal consolidation, and we will evaluate and pursue accretive opportunities to enhance our organic growth strategy, all within our usual financial discipline. Our capital allocation strategy has provided us with a strong balance sheet that gives us the flexibility to act opportunistically, and our success in achieving synergy targets demonstrates our ability to execute. In addition, our strategic and innovative initiatives in content, programming and sales give us the ability to create additional shareholder value through M&A, whether vertical or horizontal, beyond traditional revenue and cost synergies," Lougee said in a statement.