Sinclair Reports Positive End to 2007, Raises Dividend
February 8, 2008
Sinclair, Broadcast Group, the nation’s largest owner of TV stations, reported steady numbers for 2007 and a rise in some indicators at the end of the year.
Net broadcast revenues from continuing operations were $622.6 million in 2007, down just a notch from $627.1 million in 2006. Operating income rose by a bump to $159.2, 0.3 percent above $158.7 million in 2006.
“We finished 2007 on a very positive note,” said David Smith, Sinclair president and CEO of Sinclair. “Our advertising time sales during the fourth quarter of 2007 were up on a local and national basis, excluding political revenues, while advertising spending by the automotive sector, which has been down for some time, posted a 1.9 percent increase in the quarter and a 1.2 percent increase in December. For the year, we grew our cash flow, which is an impressive result considering that 2007 was a nonpolitical election year.”
The company started 2008 with a windfall from its 19 Fox affiliates, which raked in an additional $4.9 million with Super Bowl XLII. Smith said Sinclair’s CW and MyNetworkTV stations will likely show growth in their second year as new networks.
The company’s board of directors said it increased its annual common stock dividend by $0.10 per share, bringing the annual dividend rate to $0.80 per share. At an approximate $8.90 current stock price, this represents a 9 percent common stock dividend yield, Smith said.
The company figures its stock is undervalued so the board renewed its authorization for the purchase of up to $150 million worth of common shares.
For the fourth quarter of the year, net broadcast revenues were $165.7 million, a 2.1 percent drop from the year-earlier revenues of $169.2 million. But operating income in Q4 rose 23.2 percent over the year-ago quarter to $47.0 million, despite a near-absence of political advertising in the quarter, boosted by the sale of WGGB in Springfield, Mass., for $21.2 million.
Among its other recent moves, in December, Sinclair expanded news coverage at WEAR in Pensacola, Fla., adding a one-hour newscast at 4 p.m. The company also invested $17 million in real estate ventures during 2007. So far in 2008, it has invested $4.4 million more in real estate and another $3 million in a venture capital fund, Patriot Capital II.
The company said its income from retransmission agreements will grow to just over $67 million this year, from about $59 million in 2007.