Sinclair loses 39 cents a share in 3Q, from gain of 18 cents

Broadcaster lowers estimates for 4Q, year

November 09, 2001|By Gus G. Sentementes | Gus G. Sentementes,SUN STAFF

Hurt by the weak advertising market immediately after the Sept. 11 terrorist attacks, Sinclair Broadcast Group Inc. of Cockeysville yesterday reported a third-quarter loss, and reduced fourth-quarter and year-end estimates.

The loss was $29.9 million, or 39 cents a share, compared with net income of $18.8 million, or 18 cents, in the third quarter last year. Sales fell 11 percent to $167.6 million from $187.6 million.

Sinclair said in September that third-quarter broadcast revenue would fall more than forecast because the terrorist attacks aggravated a decline in ad spending by U.S. companies. Sinclair said yesterday that the effects of the attacks will continue to hurt results.

"Many advertisers are re-evaluating their marketing plans, which has continued to limit our visibility regarding the advertising climate," Chief Financial Officer David B. Amy said in a statement.

Amy had said previously that, before the Sept. 11 attacks took place, Sinclair was on target to hit its numbers for the third quarter.

Broadcast cash flow from continuing operations fell 26.6 percent to $58.4 million, while after tax cash flow per share fell 39 percent to 25 cents per share from 41 cents.

The results beat the First Call consensus estimates of 13 cents a share. Net broadcast revenue totaled $153.1 million, down 12 percent from the corresponding period last year.

Sinclair, which owns, operates or programs 63 TV stations in 40 markets, reported that net broadcast revenue from continuing operations fell 12 percent to $153.1 in the quarter. The company is among the largest TV station owners in the country.

Steve Vonder Haar, an analyst with the Yankee Group of Boston, said that the effects of the Sept. 11 attacks continue to ripple through the entire economy, and companies and marketers are trying to get a better grasp on consumer confidence.

For the full-year 2001, Sinclair's guidance for net broadcast revenue was revised down to 12.5 to 13 percent, while broadcast cash flow was revised down to 26.5 to 27.5 percent and after-tax cash flow per share was revised to be $1.05 to $1.07.

Sinclair said it expects pro forma net broadcast revenues for the fourth quarter to be down 17.5 percent to 18.5 percent from fourth quarter 2000 pro forma net broadcast revenue of $199.5 million. Sinclair expects pro forma broadcast cash flow to be down 38 percent to 40 percent from fourth quarter 2000 pro forma broadcast cash flow of $101.2 million.

Shares of Sinclair rose 34 cents to $7.60. They've fallen 24 percent this year.

Wire services contributed to this article.

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