Nexstar Media Group, Inc. (NXST) Q3 2020 Earnings Call Transcript @themotleyfool #stocks $NXST
Third quarter television advertising revenue of $514.3 million includes political revenue of $132.4 million and core advertising revenue of $381.9 million. Third quarter political spending by political action committees and candidates exceeded our projections and with election day now behind us and the potential for additional spending with runoffs, we will exceed our prior 2020 full year expectation for net political revenue in the low $400 million range by approximately 20%. Looking ahead to the fourth quarter, we continue to see month-over-month improvements in our core pacing data with the exception of October due to political displacement and our expected record results will reflect the final five weeks of political spending that led up to election day. We are highly encouraged by the advertising rebound across our station footprint, most notably in auto, our largest core advertising category, which is pacing up significantly from where the third quarter finished. The resumption in auto category spending is complemented by a big resurgence in big box retail spending as well as ad spending in fast food, home improvement, attorneys, alcohol, furniture and a new category of sports wagering. Our new business strategies, ongoing sales training, education, development and support and performance-focused incentive in structures have proven very effective in our ability to capture ad spend, both in Broadcast and in Digital. Now more than ever, viewers rely on television news to stay informed about everything from the latest pandemic developments to the Supreme Court nominations to consumers’ current appetite for political and election coverage.
Similarly, the digital engagement statistics remain significant and continue to show a 20% increase over our prior year numbers. In terms of unique users, Nexstar’s Digital properties ranked number one for local news, number 15 in total news and information and number 36 overall in August as measured by Comscore. With our market-leading stations, deep local national reach of — and WGN’s News Nation, Nexstar now produces over 268,000 hours of content annually. We successfully launched WGN America’s Primetime National Newscast, News Nation on September 1. In addition to the live nightly Newscast, News Nation’s team of reporters and producers are now delivering news 24 hours a day online through the newsnationnow mobile app, which creates another opportunity for monetization and revenue diversification. We are very pleased with the News Nation content and overall product as well as the ability of the newscast to stay true to our goal of presenting news in an unbiased manner. Our ability to quickly compete with the incumbent cable news providers is reflected by the fact that our newsnationnow app was the first to break the news on Justice Ginsburg’s passing, President Trump’s COVID diagnosis, the passing of pitcher great Tom Seaver and the plot to kidnap the governor of Michigan. Going forward, we are focused on improving national awareness of the three-hour nightly telecast and attracting strong interest for the on-air and Digital offerings from the leading national advertisers. As referenced a moment ago, last month, we announced an operational realignment, whereby we combine Nexstar’s Broadcasting and Digital operations into a new company called Nexstar, Inc. The new structure, along with the appointment of proven divisional leaders is intended to accelerate growth as we maximize the value of our content, national reach, significant consumer digital usage across all of our platforms.