Sinclair Broadcast Group Inc. reported yesterday that its loss worsened in the first-quarter, but company officials said they were beginning to see a pickup in advertising.
The loss was $43 million, or 54 cents a share, compared with a loss of $36.6 million, or 46 cents a share, in the first quarter last year.
Analysts said the loss was inflated because the quarter, which ended March 31, included a $41.6 million writedown for goodwill, the difference between the price paid for a Federal Communications license and the fair market value. It must be reported periodically.
'They're doing better'
Excluding goodwill, Sinclair performed well despite a weak advertising climate, said David M. Goldsmith, an analyst with Buckingham Research Group in New York.
"Like the rest of the industry, they're doing better," Goldsmith said. "There's an upturn in advertising. Sinclair is feeling it and everybody is feeling it."
The company's broadcast cash flow - a key indicator - increased 1.5 percent, from $54 million to $54.8 million.
Hunt Valley-based Sinclair's local advertising revenue rose 3.2 percent, but national advertisingcontinued to be weak, company officials said. Advertising for Sinclair's WB and UPN stations also remained low.
Sinclair officials didn't return calls yesterday evening.
Ad gains anticipated
In a conference call, David D. Smith, the company's chief executive officer and president, said he expected earnings to increase as the advertising market and the economy improve. As the election season approaches, he said, political advertising should boost revenue.
"We think that the larger part of the downturn is now behind us, and I think we're clearly starting to move in the right direction again," Smith said.
Sinclair, which will own or operate 62 television stations in 39 markets after certain transactions are completed, said it expects broadcast revenue for the second quarter to increase 1 percent to 2 percent from last year and broadcast cash flow to remain unchanged or increase up to 2.5 percent.
Sinclair's shares gained 9 cents yesterday to close at $13.15.
Bloomberg News contributed to this article.