Revenue was up during Q2 2013 for LIN, a function of adding stations via the acquisition route, but overall profits were down. The absence of political income and the presence of a slow economic recovery received the blame for the loss of margin.
The increase in stations produced a 36% increase in net revenue to $164.3M. Local, which includes retrans and station website cash, was up 44% to $107.1M; and national was up 28% to $32.6M. Digital, fueled by the acquisition of Dedicated Media and HYFN in April, was up almost double, 98% to $20.8M.
Now for the bad news: Political fell from $7.6M to $1.5M – par for the course in an odd year.
But operating income was also down to $26.9M, a 23% loss. Earnings per diluted share fell from $0.48 to $0.13, but much of the loss was due to $0.21 earned in Q2 2012 attributed to the sale of certain discontinued operations.
President and Chief Executive Officer Vincent L. Sadusky commented, “Our results were driven by our recent television station acquisitions, higher pay TV subscriber fees and signficiant growth in our digital business, both organically and by adding HYFN and Dedicated Media to our portfolio.”
Getting out his crystal ball, Sadusky added, “Looking ahead, the absence of political revenues and the slow economic recovery will negatively impact growth for the remainder of 2013. We will continue to remain focused on executing our strategy that has helped transform LIN Media into a more diversified, multimedia company with superior content and marketing solutions for every screen.”
LIN reported a loss in the automotive category compared to Q2 2012 of 3%, on of the few red-ink postings in that area seen by RBR-TVBR of late.
LIN issued a largely pessimistic forecast for the remainder of the year: “The Company expects that net revenues for the third quarter of 2013 will increase in the range of 22% to 25% (or $28.9 million to $32.9 million), as compared to net revenues of $133.1 million in the third quarter of 2012, primarily as a result of the Company’s recent acquisitions. On a same station basis, the Company expects that net revenues will be down 10% to 11% compared to the third quarter of 2012, due largely to the absence of significant political advertising.”
A bigger pile of cash flowing into the company is attributed to owning more stations. LIN’s $342.4M acquisition of New Vision television properties closed last October, and included the following stations: * WIAT-TV Birmingham AL * KIMT-TV Mason City IA * KOIN-TV Portland OR * KHON-TV Honolulu HI; KHAW-TV Hilo HI; KAII-TV Wailuku HI * KSNW-TV Wichita KS; KSNC-TV Great Bend KS; KSNG-TV Garden City KS KSNK-TV McCook NE; KSNL-LD Salina KS * KSNT-TV Topeka KS; KTMJ-CA Topeka KS; KETM-LP Emporia KS; KMJT-LP Ogden KS; plus SSA with Vaughan Media’s KTKA-TV Topeka KS * WJCL-TV Savannah GA; plus SSA with Vaughan Media’s WTGS-TV Savannah GA * WKBN-TV/ WYFX-LD Youngstown OH ; plus SSA with Vaughan Media’s WYTV Youngstown OH