Sinclair sees fourth-quarter profit, reversing trend

Record level of political advertising boosts revenue

February 09, 2011|By Lorraine Mirabella, The Baltimore Sun

Hunt Valley-based Sinclair Broadcast Group Inc. reported Wednesday a fourth-quarter profit of $33.1 million, or 40 cents per share, reversing a fourth-quarter loss in 2009 as strong political advertising boosted the company's year-end performance.

The television station owner said it was reinstating its dividend and declared a 12-cent quarterly dividend per share beginning March 15.

In the fourth quarter of 2009, the company reported a net loss in its broadcast group of $67.8 million, or 85 cents per common share.

The year ended on a stronger-than-expected note, with a record level of political advertising boosting net broadcast revenues, said David Smith, Sinclair's president and chief executive. Station broadcast revenues rose to $189.9 million in the fourth quarter of 2010 from $153.8 million in the same quarter a year earlier, an increase of 23.5 percent, the company said.

The results, which met Wall Street expectations, showed the resilience of the broadcast industry and its appeal to advertisers trying to reach a mass audience, said David Amy, Sinclair's chief financial officer.

"We believe our model is alive and well," Amy said during a conference call with analysts. "We have withstood the challenges thrown at us from the Internet, the DVR, the proliferation of 500 cable channels and even the economic recession."

Political ads brought in $26.8 million in revenue in the last three months of the year and hit an all-time annual high of $41.9 million, the company reported. The automotive industry's recovery helped as well, Smith said. Excluding political ads, revenue from the core television business rose 12 percent because of advertising in that sector, he said.

"We expect to see continued improvement in our core advertising driving our top line in 2011," Smith said.

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