Sinclair posts better-than-expected results
Ad spending trends help shares rise up to 13%BANGALORE -- U.S. TV station owner Sinclair Broadcast Group Inc. posted better-than-expected quarterly results, helped by improved advertising spending trends by the automotive sector and lower operating expenses, sending its shares up as much as 13%.
The company expects first-quarter station net broadcast revenue from continuing operations, before barter, to grow in the low double-digit percent range, compared with station net broadcast revenue of $131.3 million, a year ago.
The company expects advertising by the automotive sector to rise almost 20% in the first quarter compared with the previous year.
"It's going to be a terrific year for Sinclair," The Benchmark Co analyst Edward Atorino said.
The analyst expects the company to benefit from strong automotive and political spending and a recovery in its core television broadcast business.
Like most media companies, Sinclair Broadcast, which operates 58 TV stations in 35 U.S. markets, had been grappling with a relentless decline in advertising revenue brought on by the recession.
"We believe we are being led out of the advertising recession on the backs of the automotive industry which appear to be focused once again on growing their market share," Chief Financial Officer David Amy said in a statement.
For the fourth quarter, net loss attributable to Sinclair Broadcast Group was $67.8 million, or 85 cents a share, compared with a loss of $283.5 million, or $3.46 per share.
Excluding special items, Sinclair Broadcast earned 24 cents a share.
Analysts were expecting 17 cents a share, according to Thomson Reuters I/B/E/S.
Revenue dipped about 6% to $183.3 million, modestly exceeding analysts' expectations of $182.3 million. The revenue decline was primarily due to a fall in political revenue to $4.1 million from $25.6 million.
Operating expenses dropped 59% to $249.4 million.
The company's shares, which have gained about 159% of their value in the past six months, rose as much as 13% to a new year-high of $6.05 Wednesday morning to be one of the highest percentage gainers on Nasdaq. They later pared some of their gains to trade up 6% at $5.86.