Sinclair Broadcast Group today reported that its third quarter media revenues, before barter, decreased 1.7% to $624.2 million versus $635.3 million in the third quarter of 2016.
The company’s 3Q total revenues decreased 3.3% to $670.9 million, versus $693.8 million in the prior year period. The decrease included $3.1 million of lost revenue as a result of the impact of the hurricane season and other one-time adjustments. The revenue fell short of Wall Street expectations. Three analysts surveyed by Zacks Investment Research expected $672.1 million.
Breaking down the 3Q media revenue:
- Political revenues were $7.3 million versus $45.0 million in the third quarter of 2016, a presidential election year.
- Revenues from digital offerings increased 55%, as compared to the third quarter of 2016.
The company’s 3Q operating income was $103.4 million, including $8.8 million of one-time transaction and spectrum auction expenses, and $3.1 million of lost revenue as a result of the impact of the hurricane season and other one-time adjustments, versus operating income of $154.0 million in the prior year period.
The company’s net income was was $30.6 million versus net income of $50.8 million in the prior year period.
Diluted earnings per common share were $0.30 as compared to $0.54 in the prior year period. The results also fell short of Wall Street expectations. The average estimate of four analysts surveyed by Zacks was for earnings of 39 cents per share.
David Smith, executive chairman, commented: “This month, the Federal Communications Commission will be addressing certain deregulatory rulemakings for the television broadcast industry, recognizing that the competitive marketplace has changed and broadcasters actually do compete against everyone for viewers and advertising dollars. Their review also recognizes that the current rules no longer reflect the realities of today’s media landscape and consumer viewing habits. We applaud the FCC’s action to level the playing field, especially in light of emerging technologies and consolidation in the telecom and cable industries.
“We also eagerly anticipate the FCC’s approval of ATSC 3.0, ushering in the next generation of broadcast transmission and offering the public advanced nation-wide services and emergency alerting.
“Meanwhile, we continue to work with the required governmental agencies towards the successful acquisition of Tribune Media Co., expected to close in early 2018.”
Chris Ripley, president-CEO, said: “We exceeded our third quarter adjusted operating income expectations previously provided, that excluded the acquisition of Bonten Media which closed in September of this year.
“Despite challenges in the quarter, including Hurricanes Harvey and Irma, the loss of certain technical school advertisers versus last year and mainly transaction-related one-time charges, Sinclair stations continued to deliver. In the quarter, we grew our share of our markets’ revenues, excluding political, versus last year. Looking ahead to the fourth quarter, our expectation is for pro forma core advertising revenues, including Bonten, to grow mid-single digit percentage points over the same period last year.”
Ripley continued: “We continue to make progress in partnering with virtual MVPD providers for the carriage of our signals, adding several new distributors recently. In addition, we renewed several Fox and CBS network affiliation agreements. We capitalized on recent share price weakness by repurchasing one million shares in the quarter, while at the same time strengthening our balance sheet, improving our credit statistics to some of their highest quality in our history as a publicly traded company.”
Read the company’s report here.
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