Television group Sinclair has closed on two multiple-station acquisitions so far in 2012. And it was also expected to have a good first quarter, and it posted results that were better than good.
The company generated revenues of $192.2M, a 23.2% gain over Q1 2011 and in excess of what at least one observer – Wells Fargo – was expecting (it was looking for $187.9M).
Operating income increased from $51.5M to $59.9M, and net income increased from $15.3M to $29.4M.
“We are extremely pleased with our progress in integrating the newly acquired stations into our Company,” commented David Smith, President and CEO of Sinclair. “This was an enormous task given the number of stations added, and the level of success we have had with the transition speaks volumes to the focus and quality of our staff and management team. One of our early successes among the newly acquired stations include WPEC, the CBS affiliate in West Palm Beach which we acquired from Freedom, and which was rated number one in the February 2012 ratings book in the 11:00 pm news among adults ages 25 and 54, Monday through Friday, for the first time since February 2010. Meanwhile, KUTV, the CBS affiliate in Salt Lake City which we acquired from Four Points, gained market revenue share year-over-year in the first quarter 2012 despite losing Oprah. As for our legacy Sinclair stations, they increased their core net broadcast revenues by 9.2% in the first quarter, excluding political and Super Bowl revenues.”
Sinclair closed on its acquisition of eight Four Points Media stations on 1/1/12, and closed on its acquisition of seven Freedom Communications stations 4/1/12.
Political has already picked up – the company brought in $3.6M compared to $600K the prior comparable quarter. However, it is expecting it to slow down due to the effective conclusion of the Republican presidential primary contest.
Sinclair said that its growth advertising categories include automotive, media, and medical; down categories include services, schools, fast food, telecommunications, pharmaceuticals and entertainment
Regarding the company’s immediate future, EVP/CFO David Amy said, “For the second quarter, we expect advertising spending by the automotive category, on a same station basis, to rebound with mid-teen percent growth, as compared to the same period last year, as the category cycles through the 2011 tsunami impact. Political, which will be a revenue contributor through the November presidential election, is expected to add $4.0 million in the second quarter.”
It expects revenue to be much higher than Q2 2011, thanks to its acquisitions. On a same-station basis, it is looking for a gain in the 2.7%-3.4% range.