Sinclair Broadcast Revenue Up 5.4%

Core business strong, but global tumult clouds future picture

Sinclair Broadcast Group reported net broadcast revenues of $155.9 million in the first quarter, an increase of 5.4% versus the first quarter a year ago. The company had operating income of $50.5 million in the three-month period, ahead of the $45.6 million it posted in the prior year's first quarter.

"We continue to see growth in our core business, both in the first quarter and in our second quarter expectations," commented David Smith, president and CEO of Sinclair. "We are also seeing continued advertising growth in the auto category, although our outlook provides for some slowing due to new car production disruptions as a result of the Japanese crisis. We believe that once the auto parts and supply issues are addressed, manufacturers and dealers will increase their advertising in order to announce restocked inventories and to compete for their share of any pent up consumer demand."

Political revenues were $0.6 million in the first quarter 2011 versus $1.5 million in first quarter 2010. Revenues related to the 2011 Super Bowl, which aired on Sinclair's 20 Fox affiliates, were $6.2 million--a 26.5% increase for Sinclair over when the 2008 Bowl aired on Fox.

Local net broadcast revenues were up 7.6% in the first quarter, while national revenues were down 1.4%. Advertising categories that reported the largest spending increases in the quarter were automotive, schools, pharmaceuticals and furniture.

Sinclair expects second quarter station revenue to be up between 0.3% and 1.6%. "We remain confident in the strength of our core business for the full year 2011," said David Amy, EVP and CFO. "Our cautious net broadcast revenue guidance for the second quarter reflects factors beyond our control, including the Japanese crisis and political upheaval in the Middle East and northern Africa, which are creating supply chain issues and accelerated oil prices."