Stratospheric Q2 for politically-enriched Sinclair


SBG / Sinclair Broadcast GroupSinclair Broadcast Group didn’t quite reach the 5% thresholdwhen measuring its net revenue growth on a same-station basis for core advertising categories. However, when political is factored in, it is a much different story.
President/CEO David Smith explained, “Second quarter results were excellent, as political advertising spending in the quarter was almost triple our expectations. Despite the markets’ concern about the global economy, our core revenues on a same station basis grew 4.6%.”
Net broadcasting revenue from continuing operations rose 38.1% to $220M, and operating income rose from $58.2M to $72M. Diluted earnings per share came home at $0.37, compared to $0.23 the year prior.
Sinclair released the following highlights:
* Political revenues were $11.4 million in the second quarter 2012, versus $1.2 million in second quarter 2011.
* Local net broadcast revenues, which include local time sales, retransmission revenues, and other broadcast revenues, were up 32.1% in the second quarter 2012, while national net broadcast revenues, which include national time sales and other national broadcast revenues, were up 58.2% versus the second quarter 2011. Excluding political revenues, local net broadcast revenues were up 31.0% and national net broadcast revenues were up 34.9% in the second quarter 2012. On a same station basis, excluding political revenues, local net broadcast revenues were up 4.5% and national net broadcast revenues were up 4.7%.
* Advertising categories, on a same station basis, that reported the largest spending increases in the second quarter 2012, as compared to the same period last year, were automotive, services, and direct response, while fast food, schools, and tecommunications were down the most.  Automotive, our largest category, was up 16.8% in the second quarter 2012 on a same station basis.
Discussing corporate strategy, Smith said, “We continue to position the Company for long term growth as we take advantage we what we believe to be under-valued assets relative to historic public equity multiples. In the second quarter, we closed on the acquisition of the Freedom Communications television stations and recently announced the acquisition of six of the Newport Television stations. To date, we have announced approximately $1 billion in total assets acquired or to be acquired projected to represent almost $150 million of incremental blended cash flow. In addition, we were able to renew our FOX affiliation agreements seven months early, thereby removing any uncertainty regarding our on-going relationship with the network and securing our affiliation in our flagship market.”
Smith also announced good new for stockholders who may be looking for a share of Sinclair’s profits. He said, “As a result of the accretive acquisitions, the Board of Directors has decided to return a portion of that incremental cash flow to our shareholders in the form of a 25% increase to the quarterly dividend rate, bringing the dividend per share to $0.15 for the quarter.”