TEGNA beats estimates as political ad decline overshadows solid core business
Broadcaster navigates post-election cycle while $22 Nexstar deal awaits regulatory approval
TEGNA Inc shares held steady near 52-week highs Tuesday after the broadcaster reported fourth-quarter earnings that topped analyst expectations, demonstrating resilience despite a 91% plunge in political advertising revenue following the 2024 election cycle.
The Virginia-based media company reported adjusted earnings per share of $0.50 for the final quarter of 2025, surpassing analyst estimates by a significant margin. Revenue reached $706 million, beating Wall Street expectations of roughly $658 million even as total sales declined 19% year-over-year due to the cyclical nature of political advertising in non-election years.
The performance reflects what analysts characterize as a predictable transition from the record-shattering 2024 presidential election cycle, which generated unprecedented political ad spending across broadcasters. TEGNA's adjusted EBITDA fell 48% to $161 million in the quarter, highlighting the impact of that revenue swing on the company's bottom line.
Shares of TEGNA traded around $20.95 Tuesday, hovering near 52-week highs and within touching distance of the $22 per share offer price from Nexstar Media Group. The $6.2 billion acquisition remains on track to close during the second half of 2026, pending regulatory approvals from both the Federal Communications Commission and Department of Justice.
TEGNA shareholders approved the merger in November 2025, and the deal has received political endorsements that could smooth the regulatory path. Former President Donald Trump voiced support for the acquisition in early February, while FCC Chairman Brendan Carr has indicated his expectation that the merger will proceed.
However, the transaction still faces scrutiny from antitrust regulators. The combined entity would reach approximately 80% of U.S. television households, far exceeding the FCC's 39% national ownership cap. The Justice Department is conducting its own review and may require Nexstar to divest certain stations to gain approval, according to reports from regulatory analysts.
Looking ahead, industry analysts project that the 2026 midterm elections could generate more than $10 billion in political advertising spending, establishing a new record. That tailwind would benefit broadcasters as they navigate the current advertising trough, with some projections suggesting political ad revenue could exceed even the 2024 presidential cycle totals.
TEGNA's core non-political advertising business, which excludes the cyclical election-year windfalls, has shown stability even as overall revenue declined. The company maintains a diversified portfolio of television stations across major U.S. markets, providing exposure to both local and national advertising demand.
The company's current valuation metrics appear to reflect both the pending acquisition and the advertising cycle dynamics. With the stock trading close to the proposed takeover price, investors seem largely to have priced in the merger outcome while discounting near-term earnings volatility tied to political spending patterns.
For investors monitoring the broadcast sector, TEGNA's results underscore the critical importance of election cycles to revenue generation while demonstrating that core advertising demand remains resilient. The combination of cyclical headwinds and consolidation opportunity makes the company a case study in how traditional media operators are navigating an evolving advertising landscape.