Sinclair 2Q Revenue Flat at $159 Million

Sinclair Broadcast Group today reported financial results for the three months ended June 30 that included net broadcast revenues from continuing operations of $159.3 million, an increase of 0.3% versus the prior-year period result of $158.7 million.

The company had operating income of $57.6 million in the quarter, up 2.8% from $56 million a year ago.

Net income was $18.6 million, an increase of 7.5% from $17.3 million in the prior year period.

Quarterly highlights included:

• Political revenues were $1.2 million in the second quarter 2011 versus $3.8 million in second quarter 2010.
• Local net broadcast revenues, which include local time sales, retransmission revenues, and other broadcast revenues, were up 5% in the second quarter, while national net broadcast revenues, which include national time sales and other national broadcast revenues, were down 12.8% versus the second quarter 2010. Excluding political revenues, local net broadcast revenues were up 5.3% and national net broadcast revenues were down 7.8% in the second quarter due to declines in spending by telecommunications, media, home products and the services categories.
• Advertising categories that reported the largest spending increases in the second quarter were automotive, retail, paid programming/direct response and medical, while services, media spending, telecommunications and home products were down the most. Automotive, Sinclair’s largest category, was up 2.4% in the quarter.

“Despite the production disruptions in the auto industry as a result of the Japanese earthquake and tsunami, ad spending on our stations by the auto industry grew 2.4% in the second quarter due to increased spending by local dealers,” commented David Smith, president-CEO of Sinclair. “While Toyota and Honda were affected the most, other auto dealers such as Hyundai, Kia and GM increased their marketing. During the quarter, we also experienced growth in paid programming/direct response, categories which had been down for quite some time, but appear to have turned the corner.”

Smith continued: “The political season is beginning to heat up, and with a cast of Republican presidential contenders, that should make for robust political spending during the primaries. We further expect issue spending to increase as a result of the many heated topics facing the country, particularly as a result of the nation’s debt crisis, increased government spending and continued high unemployment.

“We believe that political spending at the state and local levels will increase in the upcoming political season due to highly charged issues such as state and municipal employee collective bargaining, immigration and state government budgets. While it is still too early for us to predict political revenues in 2012, recent estimates by third parties range from increases of high single digits to high teen percents versus 2010 levels.”

Read the company’s report here.