Sinclair Broadcast Group Inc. said Wednesday that net income dipped 4 percent in the third quarter and that earnings missed analysts' estimates of 21 cents per share, despite the company's reported gain in revenue that included higher-than-expected sales of political advertising.
The Hunt Valley-based television station owner and operator reported net income attributable to the parent company of $14.3 million, or 18 cents per share, for the three months ending Sept. 30, compared with net income of $14.9 million, or 19 cents per share, in the third quarter of 2009.
Sinclair saw television station broadcast revenue jump more than 16 percent to $158.8 million in the third quarter from $136.4 million in the third quarter of 2009. Operating income rose to $56.1 million, compared with $35.7 million in the same period a year earlier. Revenue gains were offset by higher operating expenses, which rose to $130.3 million from $124.4 million, the company said.
Political advertising of $9.8 million ended up being higher than expected, a trend likely to continue in the fourth quarter, when the company expects to bring in $26.8 million in political ad revenues, said David Smith, Sinclair's president and chief executive. Automotive advertising, the broadcaster's largest category, rose 43.9 percent in the third quarter, Sinclair said.
Smith said he expected business in 2011 to be stronger than in typical nonelection years, thanks to a recovering economy and the Super Bowl's airing on the Fox network, of which Sinclair owns 20 affiliates.
Because of anticipated results for this year and the 2011 outlook, the company's board of directors said it would pay a special dividend of 43 cents per share. The company had halted regular dividend payments in the first quarter of 2009 because of the recession.