Sinclair beats the Street and ups dividend


Sinclair Broadcasting Group saw its stock price rise Wednesday after the company’s Q4 financial results came in ahead of expectations and the company’s board has also increased the annual dividend payment to 80 cents a share, a yield of 9% based on the pre-announcement closing price. But even with the price increase that was taking place on Wall Street as he spoke, CFO David Amy suggested that a sense of humor was necessary to evaluate the trading price of Sinclair against any of the usual metrics for financial performance. In keeping with the view that the company’s stock is undervalued by Wall Street, Sinclair’s board of directors has renewed its stock buyback program, authorizing management to repurchase up to 150 million bucks worth of the company’s stock.

While political ad revenues were largely missing in Q4 compared to a year earlier, CEO David Smith noted that Sinclair grew ad sales for both local and national. Broadcast revenues for the quarter were down 2.1% to 165.7 million, beating the company’s guidance and analysts’ expectations. With the Super Bowl on its 19 Fox affiliates this month and good sales across many categories, Sinclair is telling the Street that Q1 revenues should be up 8-9.6%. Television Group COO Steve Marks suggested in the conference call that the automotive category may finally have hit bottom, with auto currently pacing down only slightly for Q1. He also noted that Sinclair is not only getting political buys on its big four network stations, but that the Barack Obama campaign has also been buying on Sinclair’s CW and MyNetworkTV stations.

Wachovia analyst Marci Ryvicker called the Q1 guidance “strong,” noting that both political and retrans revenues are coming in higher than she had earlier projected.