Sinclair Broadcast Group Inc. saw profit for the third quarter jump 38 percent, benefiting from strength in television advertising and growth in revenue from fees broadcasters charge cable TV companies to carry their signals.
The Hunt Valley-based TV station owner reported income of $36.3 million, or 36 cents per share, for the three months ended Sept. 30, up from $26.2 million, or 32 cents a share, a year earlier.
Broadcast revenue from continuing operations for the quarter jumped 34.7 percent, to $303 million from $225 million, the company reported Wednesday.
"We are pleased with our solid third-quarter results and expect to continue to grow our revenue share and provide additional value to our shareholders through our station acquisitions and the synergies and efficiencies of scale that we are creating as we continue to consolidate," Sinclair CEO David Smith said in a statement.
Shares in Sinclair rose 32 cents to $34.17 Wednesday in Nasdaq trading.
Sinclair's results topped Wall Street expectations of 23 cents a share thanks to an earlier-than-expected August acquisition of Fisher Communications, said Marci Ryvicker, a senior analyst with Wells Fargo Securities.
"On the surface it appears as though [the third quarter] was solid and [the fourth quarter] is pacing in-line or better than expected," Ryvicker said in a research note.
The results included an 11 percent increase in broadcast revenue at the company's TV stations, even without the political advertisements that have helped drive growth. Much of the increase came from revenue from the "retransmission" fees charged to cable companies.
Automotive-related advertising grew more than 9 percent, with other fast-growing categories including grocery, media, furniture and home products, the company said.
The broadcaster has been actively acquiring stations and is on track to become the largest TV broadcaster in the country.
In addition to the $373 Fisher million acquisition, Sinclair recently closed on a $115.3 million purchase of television stations from Titan Television Broadcast Group. Sinclair also plans to purchase the assets of eight television stations owned by New Age Media for $90 million.
"We are beginning to assess other possible avenues for growth after the industry consolidates, including enhancing our original content offerings and distribution [and] the pursuit of strategic partnerships," Smith said in the statement.
During a conference call with analysts, Smith said the company has had success with its Ring of Honor wrestling programming and is exploring creating programs focusing on high school sports.
"You can assume, now that we've reached the level we have, that we are going to move as quickly as possible to create the structure to put us in the content business at the local level," Smith said.