Mid-day trading of Nexstar’s stock was up 4.5% to $94.91.
A big political advertising season in the third and fourth quarters typically pushes out a TV station's core-advertiser's scheduled inventory.
“We thought that political ... would drive core ad revenues to decline 5%,” says Zack Silver, media analyst of B.Riley FBR. “But reported fourth-quarter 2018 core advertising declined 2%, an improvement from the 5% decline in third-quarter 2018.”
Local nonpolitical advertising slipped 1.5% to $216.5 million, with national spot advertising down 1.8% to $81.9 million. Political advertising in the fourth quarter 2018 was $140 million versus $12.5 million in the fourth quarter 2017.
Silver also notes: “November and December were the strongest months for nonpolitical advertising in 2018, excluding February, which featured the Winter Olympics.”
Overall, Nexstar posted 22% higher revenues to $798 million in the fourth quarter, with retransmission revenues climbing 12% to $285 million -- both higher than estimated. Digital advertising revenue grew 3.3% to $65.1 million.
Net income was down 60% to $154.5 million. Effective January 2018, the company adopted new accounting standards.
Nexstar says its yet-to-close $4.1 billion Tribune Media acquisition is expected to nearly double average annual revenue. For 2018, revenue grew 18% to $1.34 billion. Nexstar expects about 46% growth in annual free cash flow to about $900 million per year.