Sinclair Broadcast Group Inc. saw its second-quarter income jump 61 percent and raised its quarterly dividend as political advertising far exceeded company expectations, the Hunt Valley broadcaster said Wednesday.
The company earned $30.1 million, or 37 cents per share, in the three months that ended June 30, up from $18.6 million, or 23 cents per share, in the same period the year before.
The company's stock jumped 13 percent Wednesday, rising $1.31 a share to $11.51 each in Nasdaq trading.
"Political advertising spending in the quarter was almost triple our expectations," Sinclair CEO David Smith said, adding that revenue from television stations owned by the company for at least a year increased "despite the markets' concern about the global economy."
Sales of political advertisements grew to $11.4 million, compared with $1.2 million in the second quarter of 2011, the company said.
Sinclair has been on a buying spree. In the second quarter it closed on a deal to acquire eight Freedom Communications stations, and last month it announced the purchase of six Newport Television stations. That brings the value of total assets acquired or to be acquired this year to about $1 billion, Sinclair said.
The company renewed its Fox network affiliation agreement seven months early. The relationship with Fox is especially important for Sinclair in Baltimore, where it owns Fox 45.
Because of nearly $150 million in anticipated incremental cash flow from the acquisitions, Sinclair's board raised the quarterly dividend by 25 percent, bringing it to 15 cents per share for the three-month period.
Sinclair's net broadcast revenue from continuing operations rose 38.1 percent, to $220 million for the quarter. Quarterly operating income increased to $72 million from $58.2 million last year.
Local net broadcast revenue, which includes sales of local advertisements and retransmission revenue paid by cable companies, rose more than 32 percent, while national net broadcast revenue, which includes sales of national advertisements, jumped more than 58 percent. Excluding political advertising sales, local broadcast revenue rose 31 percent, while national broadcast revenue was up nearly 35 percent.
David Amy, Sinclair's chief financial officer, said automotive ad spending, Sinclair's biggest category, was up nearly 17 percent in the second quarter and was expected to grow in the third quarter.
Revenue from political advertising is expected to increase by 61 percent to 85 percent this year through Sept. 30 compared with the first nine months of 2008, the previous presidential election year.Copyright © 2015, The Baltimore Sun