With profit down in the second quarter on lower revenues and a reduction of its debt, Sinclair Broadcast Group anticipates tough times ahead.
The station owner reported net income in the second quarter was $2.2 million, down sharply from $10.3 million in the year ago period, and diluted EPS of $0.03 per share in Q2 versus $0.12 in Q2 2006.
Sinclair’s total revenues for the second quarter were $180.7 million, down from $185 million in the second quarter of 2006. Net broadcast revenues were $161.4 million, a decrease of 1.4% versus the prior year period result of $163.8 million.
Local advertising revenue was down 0.8% in the quarter while national revenues dropped 9.2%, on weakness on the MyNetworkTV stations. Time sales on MyNetwork TV stations were down 21.2% in the quarter. Weakness was also noted on Sinclair’s CW stations, which were down 3.4%, and its NBC station, which was down 10.2%.
"We are currently forecasting our third quarter broadcast revenues to decline by $2.9 million to $4.7 million primarily due to tougher primetime comps faced by the stations affiliated with MyNetworkTV, a continued soft Columbus, Ohio market, which is our largest market, and almost $2.0 million less in network compensation," Sinclair’s CFO David Amy said in a statement.
Sinclair also called in a portion of its outstanding 8.00% notes and took a $15 million charge for the transaction in the quarter, negatively affecting its bottom line.
The company announced this morning it is selling ABC affiliate WGGB-TV, in Springfield, Mass., to Gormally Broadcasting for $21.2 million in cash. The deal is expected to close in Q4.