Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at AMC Networks (NASDAQ: AMCX) and its peers.
Broadcasting companies have been facing secular headwinds in the form of consumers abandoning traditional television and radio in favor of streaming services. As a result, many broadcasting companies have evolved by forming distribution agreements with major streaming platforms so they can get in on part of the action, but will these subscription revenues be as high quality and high margin as their legacy revenues? Only time will tell which of these broadcasters will survive the sea changes of technological advancement and fragmenting consumer attention.
The 9 broadcasting stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 0.8% while next quarter’s revenue guidance was 10.1% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.9% since the latest earnings results.
Best Q3: AMC Networks (NASDAQ: AMCX)
Originally the joint-venture of four cable television companies, AMC Networks (NASDAQ: AMCX) is a broadcaster producing a diverse range of television shows and movies.
AMC Networks reported revenues of $599.6 million, down 5.9% year on year. This print exceeded analysts’ expectations by 2.1%. Overall, it was a stunning quarter for the company with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Chief Executive Officer Kristin Dolan said: "As we manage this business within a complex and changing environment, we remain focused on our key strategic pillars - programming, partnerships and profitability. During the quarter, we made significant advancements across all three areas. We have generated $293 million of free cash flow year to date and are well on our way to delivering our stated goal of approximately half a billion dollars in cumulative free cash over two years. We also entered into new and enhanced partnerships with major companies like Charter, Netflix, Amazon and others which are driving our company forward as we continue to provide distinctive, high-quality programming to customers across an expanding array of platforms."
The stock is up 5.4% since reporting and currently trades at $8.81.
Is now the time to buy AMC Networks? Access our full analysis of the earnings results here, it’s free.
FOX (NASDAQ: FOXA)
Founded in 1915, Fox (NASDAQ: FOXA) is a diversified media company, operating prominent cable news, television broadcasting, and digital media platforms.
FOX reported revenues of $3.56 billion, up 11.1% year on year, outperforming analysts’ expectations by 5.7%. The business had an exceptional quarter with a solid beat of analysts’ adjusted operating income and EPS estimates.
FOX achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 9.9% since reporting. It currently trades at $46.01.
Is now the time to buy FOX? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: Gray Television (NYSE: GTN)
Specializing in local media coverage, Gray Television (NYSE: GTN) is a broadcast company supplying digital media to various markets in the United States.
Gray Television reported revenues of $950 million, up 18.3% year on year, falling short of analysts’ expectations by 1.8%. It was a softer quarter as it posted revenue guidance for next quarter missing analysts’ expectations significantly and a miss of analysts’ EPS estimates.
As expected, the stock is down 24.9% since the results and currently trades at $4.35.
Read our full analysis of Gray Television’s results here.
TEGNA (NYSE: TGNA)
Spun out of Gannett in 2015, TEGNA (NYSE: TGNA) is a media company operating a network of television stations and digital platforms, focusing on local news and community content.
TEGNA reported revenues of $806.8 million, up 13.1% year on year. This result surpassed analysts’ expectations by 1.4%. More broadly, it was a mixed quarter as it also recorded a decent beat of analysts’ EBITDA estimates but revenue guidance for next quarter missing analysts’ expectations.
The stock is flat since reporting and currently trades at $17.88.
Read our full, actionable report on TEGNA here, it’s free.
E.W. Scripps (NASDAQ: SSP)
Founded as a chain of daily newspapers, E.W. Scripps (NASDAQ: SSP) is a diversified media enterprise operating a range of local television stations, national networks, and digital media platforms.
E.W. Scripps reported revenues of $646.3 million, up 14.1% year on year. This print beat analysts’ expectations by 2.7%. Taking a step back, it was a mixed quarter as it also produced an impressive beat of analysts’ EBITDA estimates but a significant miss of analysts’ EPS estimates.
The stock is down 51.3% since reporting and currently trades at $1.72.
Read our full, actionable report on E.W. Scripps here, it’s free.
Market Update
As a result of the Fed's rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed's 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump's victory in the US Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain. Said differently, there's still much uncertainty around 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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