Sinclair profit rises 7% on more auto ads

Profits at the Sinclair Broadcast Group rose more than 7 percent in the second quarter as local auto dealers increased spending on television advertising, the Hunt Valley-based TV station owner reported Wednesday.

Sinclair, which owns and operates WBFF Fox 45 in Baltimore, reported net income of $18.6 million, or 23 cents per common share, for the three months that ended June 30. The company reported net income of $17.3 million, or 21 cents per common share, during the same period a year earlier.

Net broadcast revenues from continuing operations rose to $159.3 million from $158.7 million in the second quarter of 2010, the company said. Operating income increased to $57.6 million for the quarter, from $56 million a year earlier.

While the earthquake and tsunami in Japan disrupted auto production by Toyota and Honda, dealers of Hyundai, Kia and General Motors vehicles increased their advertising, said David Smith, Sinclair's president and chief executive officer. Ad spending on Sinclair stations grew 2.4 percent in the second quarter, the company said.

"During the quarter, we also experienced growth in paid programming/direct response, categories which had been down for quite some time, but appear to have turned the corner," Smith said in a statement.

Smith said he expects ad spending to continue growing in the coming political season, thanks to issues such as the national debt and unemployment and, at state and local levels, employee collective bargaining, immigration and budgets.

"The political season is beginning to heat up, and with a cast of Republican presidential contenders, that should make for robust political spending during the primaries," Smith said. "We further expect issue spending to increase as a result of the many heated topics facing the country."

The company paid a quarterly cash dividend of 12 cents per share on June 15.

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