Sinclair Broadcast earnings dip, but income tops analyst estimates

Sinclair Broadcast Group headquarters in Hunt Valley
(Kenneth K. Lam / Baltimore Sun)

Sinclair Broadcast Group Inc. saw earnings dip in a third quarter marked by TV station acquisitions and new program offerings, but still beat profit and sales expectations, the Hunt Valley-based company reported Wednesday.

The results sent its stock surging up nearly 4 percent to close Wednesday at $33.20 a share.


The broadcaster reported net income of $43.3 million, or 45 cents per share, in the three months that ended Sept. 30, compared with income of $48.3 million, or 49 cents per share, in the third quarter of 2014.

The results beat analysts' estimates of 24 cents per share, largely because of lower taxes and higher earnings before interest, taxes, depreciation and amortization, according to analysts at Wells Fargo Securities.

Sales jumped more than 10 percent, to $548.4 million. That outpaced analysts' revenue expectations of $533.52 million during a quarter without the political advertising boost of the year-earlier period. Political advertising revenue reached $7.8 million, far short of the $33.8 million in that category in the third quarter of 2014.

"Not only did our financial performance in the third quarter exceed our expectations, but we continued to expand our national footprint through additional station acquisitions," said David Smith, president and CEO of Sinclair, in the company's announcement.

Revenue got a boost from strong automobile advertising, a trend that has continued in the current quarter, and from fast-growing digital ad sales, company officials said during a conference call with analysts.

Regarding the auto ad sales, "it's across all manufacturers, quite frankly," said Steven M. Marks, vice president and co-chief operating officer of Sinclair Television Group Inc. "There's a degree of consistency."

In September, Sinclair finalized the acquisition of assets of a Fox station and a CW station in Chattanooga, Tenn., from New Age Media for $15.5 million. Deals have continued into the fourth quarter, with some $40 million worth of station acquisitions underway and expected to close by the beginning of next year.

The broadcaster also renewed its multiyear retransmission consent agreement with DISH Network during the quarter.


The company is continuing to upgrade its digital platform for mobile devices and to add new programming content in areas such as news, local sports and entertainment.

Sinclair's Ring of Honor Wrestling signed a six-month international broadcast deal with L'Equipe 21, a free, sports-based television channel in France in September and reached additional syndicated broadcast deals in Philadelphia, Detroit and Charlotte, N.C.

The broadcaster's American Sports Network signed a multiyear sub-license agreement with ESPN to televise college football and basketball games for the Mid-American Conference and basketball games for the American Athletic Conference starting with the 2015 academic year.

And in October, Sinclair launched Comet, a science fiction multichannel network in a partnership with Metro-Goldwyn-Mayer.