Sinclair Broadcast Group reported higher fourth-quarter earnings despite lower revenue thanks to the new corporate tax laws and spectrum sales.
Sinclair said it expected its acquisition of Tribune Media Co. to close in the second quarter.
Net income for the quarter jumped to $443.5 million, or $4.32 a share, versus $120.9 million, or $1.32 a share, a year ago. The earnings include a $272 million non-recurring tax benefit from the new corporate tax law. The company also saw a $225 million gain from selling spectrum in some markets.
Revenue fell 8% to $734 million. The company noted that a year ago it took in $113 million of political advertising revenue in a presidential election year.
"The fourth-quarter 2017 performance was better than expected with results that exceeded our previously provided guidance for key financial metrics, after adjusting for transaction, legal and other one-time charges," commented Chris Ripley, president and CEO. "While first quarter of 2018 is off to a slower than expected start due to our low percentage of NBC affiliates which is the network that aired the Super Bowl and Olympics, we are looking forward to growth drivers from the upcoming mid-term elections and the positive effects from tax reform and a growing economy."
Sinclair said it expects first-quarter media revenue to be between $638 million and $644 million, representing a 5.2% to 6.2% gain. That includes political advertising increasing to $8 million from $2 million a year ago.
"As we begin 2018, there are many positive events we are looking forward to driving value for the company and the industry," commented David Smith, executive chair of Sinclair. "Among them are the Federal Communications Commission's approval of ATSC 3.0 (the next-generation broadcast platform) and certain deregulatory rulemakings relating to local market and national ownership rules, both of which are important for the broadcast industry's long-term outlook. We are confident the U.S. Tax Cuts and Jobs Act tax reform legislation will result in a favorable effect through the many small and medium sized local businesses we support on the advertising front.”
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