Sinclair revenue slips in quarter

Cockeysville company mends balance sheet despite cash flow


February 04, 2000|By Mark Ribbing | Mark Ribbing,SUN STAFF

Sinclair Broadcast Group Inc. reported yesterday that its broadcast cash flow and total revenue -- two significant benchmarks of financial strength in the broadcasting industry -- were down in the company's fourth quarter.

However, Sinclair did reverse the quarterly and yearly losses that troubled 1998's balance sheet.

"This is quite simply the best balance sheet Sinclair has had in a long time," said Patrick J. Talamantes, the company's chief financial officer.

In the fourth quarter, the company enjoyed a net gain of $179.4 million, or $1.82 per share. In the fourth period of 1998, Sinclair had a net loss of $10.6 million, or 14 cents per share.

For the year, the company had $167.8 million in net income, or $1.63 per share. In the previous fiscal year, Sinclair recorded a net loss of $16.9 million, or 29 cents per share.

Yet there were still some blemishes on the balance sheet, which was released after the close of markets yesterday. Cockeysville-based Sinclair, which owns and programs television stations nationwide, said its cash flow suffered from a variety of factors, including reductions in political and children's advertising revenue.

In addition, Sinclair has been largely unable to reap the benefits of the increase in Internet-related advertising. Such ads are typically aimed at markets such as New York and San Francisco -- which have large populations of Internet users and investors -- rather than at the medium-size markets where Sinclair's stations are concentrated.

Dot-com advertising makes up less than 1 percent of Sinclair's revenue.

"We're still hoping to see a trickle-down from the major markets," said Geoffrey G. Jones, an analyst with Donaldson Lufkin & Jenrette Inc. in New York.

Total revenue stood at $204.6 million for the quarter, down slightly from the $204.9 million the company took in during the last three months of 1998. On the year, Sinclair's revenue was $733.6 mil- lion, up 17.5 percent from 1998's $624.4 million.

Broadcast cash flow, a crucial industry yardstick calculated by subtracting operating expense from total sales, was $93.7 million for the quarter, down 13.8 percent from the $108.7 million garnered at the end of the previous year. For the year, however, Sinclair's broadcast cash flow was up 8.8 percent, from $305.3 million to $332.3 million.

The earnings sheet was issued one week earlier than planned, in response to what Talamantes called recent "misinformation" about Sinclair's financial health. The company has fared poorly on Wall Street lately; its stock traded at $20 in early August but is now in the single digits. Yesterday it gained 81.25 cents to close at $9.0625.

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