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Sinclair earnings drop as broadcaster pays off debt

Sinclair Broadcast Group Inc. capped a year of strong broadcast revenue growth and station acquisitions with a 33 percent jump in fourth-quarter sales but a drop in profit as the Hunt Valley company paid off debt.

The broadcaster reported income of $2.3 million, or 2 cents per share, in the three months ended Dec. 31, compared with net income of $59 million, or 72 cents per share, in the final three months of 2012.

Its shares slid more than 5 percent to close at $26.34 each on the Nasdaq.

The profit decrease included a $42.1 million loss from debt extinguishment. Excluding that loss, earnings would have been 29 cents per share, missing Wall Street's expectations of 37 cents per share.

Revenue for October-to-December grew 33 percent to $382.3 million, compared with $287.1 million in the fourth quarter of 2012.

Sinclair CEO David Smith called the year historic, one in which the company reached a record $1.2 billion in sales, a 32 percent jump, and led the industry in station acquisitions, closing on the purchase of 63 television stations.

Fourth-quarter operating income dipped 13 percent, to $103.3 million, which the company attributed to a lack of political revenue in a nonelection year, one-time acquisitions costs and a $3.3 million loss on the sale of a station in Syracuse, N.Y.

The quarter's fastest-growing categories for advertising sales included automotive, medical, grocery, entertainment and home products, while retail, restaurants and telecommunications advertising declined.

During a conference call with analysts, Steven M. Marks, Sinclair's chief operating officer, noted that the auto advertising has started out strong this year, despite severe weather in much of the country.

"That category in particular is very encouraging," Marks said.

The company has been on a television station buying binge. In the fourth quarter, closed deals included the purchase of 18 stations owned by Barrington Broadcasting Group LLC for $370 million.

Planned acquisitions of seven ABC affiliates and a local cable news network in Washington from Allbritton Communications Co. for nearly $1 billion are on target to close in the second quarter. That's also the target to finalize a deal to buy eight television stations from New Age Media for $90 million, the company said.

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