Sinclair To Wall Street: Core Will Be Up In ’19

“For the year, we expect core revenues to be up,” said Sinclair COO Steve Marks at the company’s first-quarter earnings call with analysts. “I’ll repeat that: For the year, we expect core revenues to be up.”

Marks apparently felt the need for emphasis because he also reported that core (spot revenue excluding political) was “down slightly” in the first quarter.

Core is “strengthening,” he said. The second quarter will be flat to up low single digits and the third and fourth quarter “are expected to be positive as well.”

Sinclair did not break out actual spot revenue in its earning report or in the conference call.

According to Marks, Sinclair is experiencing second-quarter growth in two of its three biggest auto subcategories, domestic dealers and domestic manufacturers, and the third, foreign dealers, is down less than 1%.

“So, the three biggest categories we have are propelling our efforts right now and that gives us a reason to believe that we’re turning the corner.”

Sinclair CEO Chris Ripley said there were “quite a few” other categories that are up in the second quarter that were down in the first.

“Retail in particular was down in first quarter and now is showing a nice pace for second quarter…. Services continue to be just through the roof for us. That’s our second biggest billing category next to automotive, and retail is the third.”

What’s driving the services is attorney, insurance and banking, Ripley said. “They continue to be very strong through the first six months of this year, which gives us cause to think that … we’re going to continue to roll with this right through the remainder of the year.”

Spot revenue is core plus political and Marks reminded the analysts that the political outlook was bright. “We are preparing for a strong start to the upcoming political cycle, which will drive broadcast media spending as early as the end of this year. I’ve said it before: 2020 is shaping up to be precedent-setting year for political advertising.”

Ripley added that the political will not be so strong late this year as to crowd out core advertising. That, too, bodes well for core, he said. Less political “tends to be a natural tailwind for core.”