Sinclair group reports loss of $1.42 million in 2nd quarter

Figures improve over '01

advertising rebound seen

August 02, 2002|By Andrea K. Walker | Andrea K. Walker,SUN STAFF

Sinclair Broadcast Group Inc. reported yesterday a $1.42 million loss in the second quarter, but said it expects the company's outlook to improve as advertising spending increases.

The loss of 5 cents a share was an improvement over the company's $17.7 million, or 24 cents a share, loss during the corresponding period last year. The company owns, operates and programs 62 television stations in 39 markets.

Analysts said Sinclair, like much of the rest of the television industry, is beginning to see the impact of a rebounding advertising environment.

"Advertising has come back, and we're seeing more spending on TV ads," said Todd Morgan, an analyst with CIBC World Markets Inc. in New York. "Investment is tighter and prices are firmer, or in some places higher."

In a conference call with analysts, Sinclair officials said they had seen increases in advertisements for automobiles, services and beer and wine.

Sinclair President and Chief Executive Officer David D. Smith said that advertising at its WB and UPN network stations had improved from the first quarter and "was a clear sign the market is headed in the right direction."

"Advertisers tend to place their money with the top-ranked stations and then work their dollars down over time," he said.

Cash flow for the Hunt-Valley-based Sinclair - a key indicator of success in the industry - was $77.2 million for the second quarter, an increase of 3.4 percent from 74.6 million a year earlier.

Much of the company's growth in the second quarter came from local advertising revenues, which increased 5.3 percent. National advertising revenues decreased 1.8 percent.

Sinclair stock closed yesterday at $11.28, down 47 cents.

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