LIN Media scores a strong Q3


LIN MediaNet revenues in the quarter increased 23% to $163.1 million, compared to $133.1 million in Q3 2012. Local revenues, which include local ad revenues, retransmission fee revenues and TV station website revenues, increased 44% to $105.5 million, compared to $73.1 million in Q3 2012.

A lot of the good news was due to the company’s merger in the quarter. On 7/30, LIN TV completed its merger with and into LIN Media, (previously a subsidiary of LIN TV), with LIN Media continuing as the surviving entity. After the merger, LIN TV realized a capital loss of $344 million, which represents the difference between its tax basis in the stock of LIN Television, and the fair market value of such stock as of 7/30. This capital loss and existing net operating losses were used to offset a portion of the capital gain recognized in the JV sale transaction and, as a result, during Q3 the company recognized cash income tax savings of $132.5 million.

Net national revenues increased 26% to $32.8 million, compared to $26.1 million in Q3 2012. Interactive revenues, which include revenues from LIN Digital, Nami Media, Dedicated Media, and HYFN (LIN’s full service digital agency), increased 81% to $19.5 million, compared to $10.8 million in Q3 2012.

Political revenues, like so many other broadcasters in the quarter were $2.6 million, compared to $20.4 million during Q3 2012.

Net income per share was $2.63, which includes a $2.56 per share benefit from special items, compared to $0.36 in Q3 2012, which included a charge of $0.05 per share.

Local and national time sales combined, excluding political, increased 31% in the quarter compared to Q3 2012. Automotive, which was 27% of local and national ad sales in the quarter, was flat compared to Q3 2012, and was up 4% on a same station basis excluding LIN’s estimate of incremental Olympics automotive advertising in 2012.

Said LIN CEO Vincent Sadusky: “We achieved another quarter of significant growth in revenues from our digital businesses and pay TV subscriber fees and our core time sales continue to gain momentum. Excluding record political revenues and our estimate of incremental Olympic revenues in 2012, core advertising revenues increased 3% on a same station basis in the third quarter. Looking forward, our long-term strategy and the increased demand for our innovative multiscreen advertising solutions position us well for the remainder of 2013 and the political year ahead.”

Looking forward, LIN Media says it expects revenues in Q4 will decrease 7%-9% (or $14.7 million to $17.7 million), as compared to net revenues of $196.2 million in Q4 2012, due to political comps vs. last year. On a same station basis, LIN expects that net revenues will be down 16% to 17% compared Q4 2012, due largely to the absence of significant political advertising.

Marci Ryvicker, Wells Fargo analyst, commented that revenues of $163 million were just shy of their $166 million expectation, but right in the middle of LIN’s $162.17 million guide. “National and political were better, at $32.8MM and $2.6MM versus our $29.6MM and $1.8MM estimates, respectively…Adjusted EBITDA was $46.2MM…We had been anticipating EBITDA of $46MM while the Street was at $45MM…Q4 core spot is pacing up 7%, which is significant acceleration vs. Q3 (-1% when including Olympics and +3% when excluding incremental Olympic revenue).”