Gray Beats Street

ATLANTA: Gray Television came in ahead of analyst expectations for the second quarter. The pure-play TV group posted revenues of $75.6 million for the 36 stations, up 16 percent from a year earlier. Analysts at Wells Fargo had prognosticated $74.1 million.

Net income was $534,000 compared to a loss of $6.6 million a year ago. After payment of $6.4 million in dividends, net loss to common stockholders was $5.9 million, or 11 cents a share.

Gray’s revenue breakdown:
- Local advertising revenue increased $2.6 million, or 6 percent, to $45.9 million.
- National increased $1.4 million, or 11 percent, to $13.8 million.
- Internet increased $400,000, or 15 percent, to $3.1 million.
- Political increased $4.6 million, or 493 percent, to $5.6 million.
- Retransmission increased $700,000, or 18 percent, to $4.7 million.
- Production and other revenue increased $200,000, or 14 percent, to $1.9 million.
- Network compensation was $173,000, up from $172,000.
- Consulting revenue from Gray’s agreement with Young Broadcasting, remained at $550,000.

Automotive was at the top of ad categories showing improvement over last year--as has been true with every reporting station group. Automotive spending increased 48 percent for Gray. Medical services was up 14 percent; financial and insurance, up 13 percent; and home improvement, 12 percent. Declining categories included communications, down 19 percent; paid programming, also down 19 percent, and restaurants, down 11 percent.

Broadcast cash flow was $29 million, up 49 percent from last year. Gray finished the quarter with $15.7 in cash, down from $16 million Dec. 31, 2009. Long-term debt, including current portion, was $846 million, up from $792 million.

For the third quarter, Gray expects a 6 percent increase in revenues excluding political, which is projected at $11.8 million. Retransmission is projected to rise $200,000 to $4.5 million. Gray’s A shares (NYSE: GTN.A) remained flat today at $2.44. The stock is up 63 percent year-to-date.

May 10, 2010: “Gray Cuts Loss in Half”
The 36 TV stations operated by Gray Television pulled in $70 million for the first quarter of 2010, up 15 percent over the comparable period last year. Net loss was $4.7 million compared to $8.9 million a year earlier.

April 20, 2010: “Gray Plans Private Placement”
Gray Television plans to offer $365 million worth of senior secured second lien notes due 2015 in a private placement

April 6, 2010: “Gray Television Cuts Losses in 2009
After a rough month in which Gray Television narrowly diverted default, the broadcast group posted reduced losses for the fourth quarter of 2009 and the full year.