Sinclair Broadcast Group Inc. lowered its estimate for third quarter media revenues on Tuesday because of weaker-than-expected spending on political advertising.
Shares of Sinclair fell more than 9 percent in Tuesday trading to close at $25.98 each.
The Hunt Valley-based broadcaster now expects media revenues of about $637 million to $638 million — a 28 percent gain compared to the third quarter of 2015, including about $46 million in political spending. Last month, the company said it expected political spending of $58 million to $68 million and media revenues in a range of $649.2 million to $663.2 million.
"Political is the most difficult part of our revenue to estimate given that advertising time is typically purchased with only a couple of days' notice prior to the ads airing," said Chris Ripley, Sinclair's chief financial officer, in a statement. "While we previously anticipated a decline in Presidential ad spending in the third quarter based on the late fundraising by the Trump campaign, we have yet to see significant spending, even at the levels we initially anticipated."
Political spending also has dropped in a Senate race in Ohio, a key state for Sinclair, as recent polls show a widening margin between the candidates, Ripley said.
Sinclair's announcement "does confirm that presidential political advertising has continued to come in lighter than expected, which will likely impact all broadcasters to some extent," said Marci Ryvicker, a senior analysts for Wells Fargo Securities, in a report.
The broadcaster is "hopeful" that close polling between Hillary Clinton and Donald Trump boosts ad spending, but "there can be no assurance this will materialize given the unusual nature of this year's election," Ripley said.
Sinclair also said it is rescinding its full-year political estimates of $260 million to $280 million. The company will report third quarter results on Nov. 2.