Sinclair Broadcast Group reported lower fourth quarter profits despite big gains in revenue, including political advertising.
Net income fell to $206.2 million, or $2.10 a share, from $443.5 million, or $4.32 a share.
The year ago quarter included a $272 million benefit from changes in the federal tax laws and a $225 million gain from selling spectrum. The impact of those items was $3.82 a share.
Revenue was up 25.4% to $893 million.
The company said media revenue increased 22.5% to $848.9 million. Distribution revenue rose to $334.1 million from $299.9 million. Political revenue was $149.6 million compared to $15.5 million a year ago.
Revenue from digital businesses increased 22.5%, the company said.
Sinclair said it expects media revenue to be between $667 million and $673 million in the first quarter of 2019.
Sinclair said that in January it renewed its affiliation agreements with NBC affiliates in 13 markets. In February it entered multi-year renewals of the 26 Fox affiliates last renewed in May of 2018. The new deal revises some terms and waives the parties’ termination rights.
“We ended 2018 on a very positive note, beating guidance on all financial metrics, with core advertising revenues improving from the first half of the year despite the crowding out effect from having our best mid-term political ad spending election year on record,” said CEO Chris Ripley.
“Building on a base of $255 million in political ad spending for 2018 and a number of candidates already declaring their candidacy for the Presidency, we expect 2020’s political advertising to be yet another record year for us, with some of the ad spending expected as early as the fourth quarter of this year," Ripley said. "In addition, we and the industry are making significant strides on the implementation of ATSC 3.0 (Next Gen Broadcast) with recent announcements of a global mobile chip design, collaboration on over-the-top and over-the-air technologies, and broad industry support to begin 3.0 deployments this year. We exited the year with a strong balance sheet and liquidity position while executing on share repurchases totaling 11% of our total shares since August 2018 and continue to create shareholder value through content acquisitions such as the Chicago Cubs RSN joint venture.”