Bolstered by healthy advertising revenue and successful acquisitions, Sinclair Broadcast Group more than doubled its profits and almost doubled its revenues over the second quarter of last year.
The Baltimore-based owner and operator of local television stations reported yesterday that its net income for the quarter that ended June 30 rose to $3 million, or 9 cents a share, up from $1.3 million, or 5 cents a share, the previous year.
Its operating cash flow, a closely watched indicator in the broadcast industry, more than doubled, from $14.2 million last year to $29.6 million.
To some extent, the company's results are inflated by its acquisition of TV stations in Norfolk, Va.; Milwaukee; Birmingham, Ala.; and Raleigh, N.C. But even with last year's results from those stations factored in, operating cash flow was still up 38.2 percent and net revenues increased 15.5 percent.
David Amy, Sinclair's chief financial officer, said the company's gains were driven by increased efficiencies at the properties it acquired, as well as a strong market for television advertising. He said Sinclair was showing year-to-date revenue growth of 7 percent to 15 percent in all of the markets it serves.
Sinclair's stock rose $1.25 to close at $30.75. The company went public June 7.
Linda Killian, an analyst with the institutional research firm Renaissance Capital in Greenwich, Conn., said the trend toward consolidation in the broadcast industry was increasing the value of stations, including Sinclair's. She noted that telecommunications legislation passed yesterday by the House would increase the number of stations a broadcaster could own.
"Any broadcast company that's been able to amass a certain number of properties at this point, given the changes in regulation, [is] well-positioned," she said.
Sinclair owns the licenses for seven TV stations, including Baltimore's Channel 45 (WBFF), and operates four on behalf of the licensees, including Channel 54 (WNUV).