Shares of Sinclair Broadcast Group Inc. fell 19.4 percent yesterday, reacting to the company's announcement late Tuesday of unexpected financial losses and the resignation of a key executive.
The company's stock closed at $13.50, a decline of $3.25 a share.
The Baltimore company owns or programs a rapidly expanding national chain of radio and television stations. Locally, the company owns Fox television affiliate WBFF (Channel 45) and programs the WB Network affiliate, WNUV (Channel 54).
David B. Amy, Sinclair's chief financial officer, said the company is close to selling some of its radio and television stations to focus on key markets after a flurry of acquisitions. Amy declined to comment on the specific nature of those plans or on the downturn in Sinclair stock.
"They don't need everything they bought," said Victor B. Miller, an analyst with Bear, Stearns & Co. Inc. in New York. "They have time now to pick and choose what they will keep."
After the close of markets Tuesday, Sinclair issued a quarterly earnings report showing a net loss of $10.6 million, or 14 cents per diluted share, in the fourth quarter that ended Dec. 31.
The loss surprised Wall Street. One survey released before the earnings report said a consensus of analyst estimates predicted a net gain of 6 cents per share.
Sinclair said its earnings were hampered by acquisition expenses and a flattening in national advertising.
In an investor report released yesterday, Merrill Lynch & Co. of New York said it had downgraded its rating of Sinclair, citing "lackluster" sales growth at some stations.
The loss was not the only unexpected news driving down Sinclair stock. Sinclair also announced after Tuesday's market close the resignation of Barry Baker, the chief executive officer-designate of a key subsidiary, Sinclair Communications Inc.
Baker, who is pursuing other business interests, headed Sinclair's day-to-day radio and television operations and was regarded as one of the leaders of Sinclair's expansion strategy.
When traders got the chance to react to these items yesterday, they jumped at the chance; 3.96 million Sinclair shares changed hands, a 2,100-percent increase over the previous day's trading volume.
Bloomberg News contributed to this article.
Pub Date: 2/11/99