Release Date: November 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Gray Television Inc (NYSE:GTN) reported a strong third quarter with total revenue of $950 million, an 18% increase from the same period in 2023.

• Net income attributable to common shareholders was $83 million, compared to a net loss of $53 million in the third quarter of 2023.

• The company successfully reduced its expenses, which were below the low end of their guidance range.

• Gray Television Inc (NYSE:GTN) achieved a 14% increase in new local direct business in Q3 2024 over Q3 2023.

• The company has made significant progress in reducing debt, repaying almost $250 million during the third quarter, with a total repayment goal of half a billion dollars by year-end.

Negative Points

• Political advertising revenue was slightly below expectations, impacting overall revenue growth.

• Core ad revenue is expected to decline in the fourth quarter compared to 2023, partly due to political displacement and the shift of Southeastern Conference football from CBS to ABC.

• The company experienced challenges with sub losses in retransmission revenue, which have been a concern across the media industry.

• There is ongoing pressure to reduce costs, including personnel expenses, which has led to job restructurings.

• Gray Television Inc (NYSE:GTN) faces uncertainties in political ad revenue due to the competitive nature of races and spending shifts outside their station footprint.

Q & A Highlights

• Warning! GuruFocus has detected 7 Warning Signs with GTN.

Q: Can you provide more details on your Q4 guidance, particularly regarding the impact of weather and the post-election core ad environment? A: Pat Lalani, President and Co-CEO, mentioned that several factors, including political crowd-out and the SEC football shift, impacted Q4. However, they are cautiously optimistic about the remainder of the quarter and 2025, noting some positive signs recently.

Q: Regarding the $60 million in run-rate savings, how should we think about the timing and any further cost actions? A: Jeff Jak, CFO, explained that most personnel-related savings have already been achieved, and other savings will start filtering through in the first quarter of next year. They are continuously monitoring for further cost actions but have nothing specific planned at the moment.

Q: Is there any structural concern with your footprint affecting political ad revenue, or was it just bad luck? A: Hilton Howell, CEO, clarified that they achieved half a billion dollars in political ad revenue, the largest among peers. Kevin Latek, Chief Legal and Development Officer, added that the shortfall was mainly due to Senate races, not structural issues.