As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the broadcasting industry, including 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 mixed Q2. As a group, revenues missed analysts’ consensus estimates by 0.8% while next quarter’s revenue guidance was in line.
Luckily, broadcasting stocks have performed well with share prices up 11.6% on average since the latest earnings results.
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 $625.9 million, down 7.8% year on year. This print exceeded analysts’ expectations by 4.1%. Despite the top-line beat, it was still a mixed quarter for the company with an impressive beat of analysts’ operating margin and earnings estimates.
Chief Executive Officer Kristin Dolan said: "AMC Networks continues to find opportunities in a strategic plan built around programming, partnerships and profitability. Key to our plan is the creation and curation of celebrated films and series, and making them available to audiences everywhere, including through an exciting new branded content licensing agreement with Netflix. In the first half of 2024, we’ve made significant progress against our strategic priority of generating strong free cash flow, and we’re well on our way to achieving our free cash flow guidance for the full year."
AMC Networks pulled off the biggest analyst estimates beat of the whole group. Even though it had a great quarter relative to its peers, the market seems discontent with the results. The stock is down 6.8% since reporting and currently trades at $8.33.
Is now the time to buy AMC Networks? Access our full analysis of the earnings results here, it’s free.
Best Q2: Paramount (NASDAQ:PARA)
Owner of Spongebob Squarepants and formerly known as ViacomCBS, Paramount Global (NASDAQ:PARA) is a major media conglomerate offering television, film production, and digital content across various global platforms.
Paramount reported revenues of $6.81 billion, down 10.5% year on year, falling short of analysts’ expectations by 5.9%. However, the business still had a strong quarter with an impressive beat of analysts’ earnings and EBITDA estimates.
The market seems happy with the results as the stock is up 6.8% since reporting. It currently trades at $10.90.
Is now the time to buy Paramount? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 $573.6 million, down 1.6% year on year, falling short of analysts’ expectations by 2%. It was a softer quarter as it posted a miss of analysts’ earnings and Local Media revenue estimates.
Interestingly, the stock is up 15.2% since the results and currently trades at $3.42.
Read our full analysis of E.W. Scripps’s results here.
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 $826 million, up 1.6% year on year. This number lagged analysts' expectations by 1.7%. Aside from that, it was a mixed quarter as it also recorded an impressive beat of analysts’ earnings estimates but a miss of analysts’ Retransmission revenue estimates.
The stock is up 8.3% since reporting and currently trades at $5.71.
Read our full, actionable report on Gray Television here, it’s free.
Nexstar Media (NASDAQ:NXST)
Founded in 1996, Nexstar (NASDAQ:NXST) is an American media company operating numerous local television stations and digital media outlets across the country.
Nexstar Media reported revenues of $1.27 billion, up 2.3% year on year. This number lagged analysts' expectations by 1%. It was a slower quarter as it also recorded a miss of analysts’ earnings estimates.
The stock is up 3% since reporting and currently trades at $177.
Read our full, actionable report on Nexstar Media here, it’s free.
Market Update
Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.
Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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