SAGA COMMUNICATIONS INC-CL A (NASDAQ:SGA) Reports Q2 2025 Earnings Miss Amid Revenue Decline and Weak Political Advertising

SAGA COMMUNICATIONS INC-CL A (NASDAQ:SGA) reported its second-quarter 2025 earnings, missing analyst estimates on both revenue and earnings per share (EPS). The company's financial performance and subsequent market reaction highlight challenges in the current operating environment.

Earnings and Revenue Performance

• Revenue: Reported $28.2 million, a 5.0% decline year-over-year and below the analyst estimate of $28.9 million.
• EPS: Came in at $0.18, falling short of the $0.19 consensus estimate. This compares to $0.40 in Q2 2024, reflecting a significant drop.
• Operating Income: Declined to $1.4 million from $2.1 million in the prior-year quarter.

The revenue contraction was driven by weaker political advertising, with gross political revenue dropping to $51 thousand from $288 thousand in Q2 2024. On a same-station basis, net revenue fell 6.4%, indicating broader softness beyond one-time factors.

Market Reaction

Following the earnings release, SGA's stock has shown a muted but negative response, with a -3.8% decline in the current session. Over the past month, the stock has trended downward (-9.8%), suggesting investor skepticism ahead of earnings. The post-earnings dip aligns with the revenue and EPS miss, though the magnitude of the decline is relatively contained, possibly due to Saga’s cost-cutting measures and stable dividend payout.

Key Takeaways from the Press Release

• Cost Management: Station operating expenses decreased 4.6%, helping mitigate some of the revenue decline.
• Dividend Commitment: The company paid a $0.25 per share quarterly dividend, maintaining its shareholder return policy. Since 2012, Saga has returned over $138 million in dividends and $58 million via buybacks.
• Asset Sales: Saga is exploring the sale of non-core tower assets, potentially generating high seven- to low eight-figure proceeds, which could fund further buybacks.
• Balance Sheet Strength: Cash and short-term investments stood at $24.9 million as of June 30, 2025, with no significant debt pressure.

Outlook vs. Analyst Estimates

The press release did not provide explicit forward guidance, leaving analysts' estimates as the primary benchmark. For Q3 2025, analysts expect revenue of $29.6 million and EPS of $0.31, while full-year 2025 projections stand at $112.6 million in sales and $0.48 EPS. Given the Q2 miss, investors may reassess these estimates, particularly if political ad spending remains subdued.

Call to Action

For a deeper dive into Saga Communications’ earnings trends and future estimates, review the latest data here.

Disclaimer: This article is not investment advice. Investors should conduct their own research or consult a financial advisor before making decisions.