Hunt Valley-based Sinclair Broadcast Group Inc. reported a 42 percent drop in profit for the first quarter, as operating and interest costs rose and revenue increased but fell short of analysts' expectations.
The television station owner and operator said Monday that its income fell to $17 million, or 21 cents per common share, from $29.4 million, or 36 cents per share, during the three months that ended March 31.
Its earnings did beat Wall Street's expectations of 17 cents per share, yet its stock fell Monday, closing at $26.69 per share, down 2.9 percent.
The sell-off may reflect Sinclair's other announcement Monday that it would offer 14 million Class A shares to raise money for pending and future potential acquisitions and other purposes.
The television station owner had announced three acquisition deals in the past two months, which would make it the largest owner of television stations in the United States. With the addition of Barrington Broadcasting, Fisher Communications and some Cox Media Group stations, Sinclair will own, operate or provide services to 134 stations in 69 markets and reach more than a third of all U.S. homes with televisions.
The broadcaster reported first-quarter revenues jumped 27 percent to $282.6 million from $222.4 million in the first quarter of 2012.
In its earnings announcement Monday, CEO David Smith said the year is "off to a solid start," thanks to $2.5 million of Super Bowl revenue; increased spending by automotive advertisers, the biggest ad category; and high ratings in February because of the popularity of local news programs.
"We intend to continue analyzing and evaluating opportunities to acquire additional television station assets towards creating greater scale for our operations and value for our shareholders," Smith said in the statement.Copyright © 2015, The Baltimore Sun