Sinclair 3Q Revenue Climbs 16% To $158.8M

Sinclair Broadcast Group today reported financial results for the three months ended Sept. 30. Net broadcast revenues from continuing operations were $158.8 million, an increase of 16.4% versus the prior year period result of $136.4 million. The company had operating income of $56.1 million in the three-month period, as compared to operating income of $35.7 million in the prior year period.

Political revenues were $9.8 million in the third quarter 2010 versus $1.9 million in third quarter 2009.

Local net broadcast revenues, which include local time sales, retransmission revenues, and other broadcast revenues, were up 11.9% in the third quarter 2010 while national net broadcast revenues, which include national time sales and other national broadcast revenues, were up 30.0% versus the third quarter 2009. Excluding political revenues, local net broadcast revenues were up 9.8% and national net broadcast revenues were up 13.8% in the third quarter.

Advertising spending categories that were up the most in the quarter were media, furniture, schools, medical, and telecommunications while paid programming, religious, retail, and fast food ad spending were down the most.

Automotive, Sinclair’s largest category, was up 43.9%, while services, our second largest category, was up 16.2% in the quarter.

Remarking on the results, David Smith, president-CEO of Sinclair, said: “Political advertising of $9.8 million in the third quarter came in higher than expected and that trend has continued in the fourth quarter where we expect $26.8 million in political revenues.

“For the year, political revenues are expected to be approximately $41.9 million, a record amount for us. This would represent a 34.7% increase over 2006’s $31.1 million in political revenues and a 1.9% increase over the 2008 presidential year’s $41.1 million. Looking ahead to 2011, early indications are that the core business will be stronger than normal non-political years driven by the Super Bowl on the Fox network, of which we have 20 affiliates, and the continued economic recovery. We believe that the core business in 2011 will grow versus 2010.”

Smith continued, “Given the expected 2010 results and our optimistic outlook for 2011, our board of directors has decided to declare and pay a special dividend in the amount of $0.43 per share. As you may recall, Sinclair had been a regular dividend payer since 2004, but had halted the dividend in the first quarter of 2009 in response to the recession, so we are pleased to once again be able to distribute a portion of our cash flow and return value to our shareholders. Our objective is to once again become a regularly paying dividend company, as well as have the ability to repurchase shares, if warranted.”

And David Amy, Sinclair’s EVP-CFO, said: “The fourth quarter is expected to provide a record year for us in terms of political revenues, which is significant given that this year was a non-presidential election year. With that kind of demand on our inventory, we experienced some crowding out of our normal advertisers in October, which is to be expected.”

Sinclair said it expects fourth quarter 2010 station net broadcast revenues from continuing operations, before barter, to be approximately $181.5 million to $185.5 million, an increase of 18.0 to 20.6% percent as compared to fourth quarter 2009 station net broadcast revenues of $153.9 million. This assumes approximately $26.8 million in political revenues in the fourth quarter as compared to $4.1 million in fourth quarter 2009.

Read the company’s report here.