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Sinclair Broadcast Group (SBGI) Tops Q4 EPS by 14c, Updates Guidance

February 6, 2013 7:36 AM EST Send to a Friend
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Sinclair Broadcast Group, Inc. (NASDAQ: SBGI) reported Q4 EPS of $0.73, $0.14 better than the analyst estimate of $0.59. Revenue for the quarter came in at $329.51 million versus the consensus estimate of $311.74 million.

Outlook:

In accordance with Regulation FD, Sinclair is providing public dissemination through this news release of its expectations for certain components of its first quarter 2013 and full year 2013 financial performance. The Company assumes no obligation to update its expectations. All matters discussed in this "Outlook" section are forward-looking and, therefore, readers should not place any undue reliance on this information and should refer to the "Forward-Looking Statements" section above.

The term "Acquisition(s)" in this Outlook section refers to the recently acquired Newport stations, KBTV and the GoCom stations for the first quarter and full year 2013, and the Freedom stations for the first quarter 2013 only.

"After ending 2012 with record levels of political advertising, we are excited about the Company's operating direction and our drivers for 2013," commented David Amy, EVP and CFO. "Early estimates for sales in the automotive industry, which is our largest advertising category, reflect 9.0% growth that we expect will translate into increased ad revenues for us. As a result of the many stations we acquired in 2012, we believe our more balanced portfolio of "big four" network-affiliated stations will allow us to increase our revenue share, especially given our content offering of highly rated shows such as the local news and sports. This was evident in the $2.5 million in Super Bowl revenues we booked this February."

The Company expects first quarter 2013 station net broadcast revenues from continuing operations, before barter, to be approximately $251.9 million to $254.9 million, up 32.0% to 33.5% as compared to first quarter 2012 results of $190.9 million. This assumes approximately $0.4 million and $2.5 million in political and Super Bowl revenues, respectively, in the first quarter 2013, as compared to $3.6 million and $0.1 million in the first quarter 2012. The 2013 first quarter net broadcast revenue estimates assume $62.6 million related to the Acquisitions. Excluding the Acquisitions, same station net broadcast revenues in the first quarter 2013 are estimated to be up 3.4% to 5.0% versus the first quarter 2012, and up 5.2% to 6.9% excluding political.

The Company expects barter revenue to be approximately $22.0 million in the first quarter 2013.

The Company expects barter expense to be approximately $22.0 million in the first quarter 2013.

The Company expects continuing operations station production expenses and station selling, general and administrative expenses (together, "television expenses"), before barter expense, to be approximately $134.9 million in the first quarter and $547.6 million for 2013, as compared to the 2012 actuals of $95.5 million and $426.8 million for the first quarter and year, respectively. The 2013 estimates assume $34.7 million and $96.5 million related to the Acquisitions for the quarter and year, respectively. The 2013 expense forecast includes $1.6 million of stock-based compensation expense for the year, as compared to $1.7 million for 2012. Excluding the Acquisitions, same station television expenses are expected to be up approximately 14.3% and 9.4% in the first quarter and full year 2013, respectively. This assumes the stations are at full staffing levels and the maximum bonus potential is earned.

The Company expects program contract amortization expense to be approximately $20.4 million in the first quarter and $80.0 million for 2013, as compared to the 2012 actuals of $14.1 million and $61.0 million for the quarter and year, respectively. The 2013 estimates assume $2.6 million and $9.1 million for the quarter and year respectively, related to the Acquisitions.

The Company expects program contract payments to be approximately $21.6 million in the first quarter and $85.0 million for 2013, as compared to the 2012 actuals of $16.4 million and $69.0 million for the quarter and year, respectively. The 2013 estimates assume $2.1 million and $8.3 million for the quarter and year respectively, related to the Acquisitions.

The Company expects corporate overhead to be approximately $10.3 million in the first quarter 2013, which includes $2.9 million of stock-based compensation, and $35.2 million for the full year, as compared to the 2012 actuals of $9.4 million and $33.4 million for the quarter and year, respectively. This includes $4.4 million of stock-based compensation expense for 2013 as compared to $4.2 million for 2012.
The Company expects other operating division revenues less other operating division expenses to be $1.9 million of income in the first quarter and $12.8 million of income for 2013 (assuming current equity interests), as compared to the 2012 actuals of $1.7 million of income in the quarter and $8.0 million of income for the year.

The Company expects depreciation on property and equipment to be approximately $16.0 million in the first quarter and $62.4 million for 2013 (assuming the capital expenditure assumptions below), as compared to the 2012 actuals of $9.3 million and $47.1 million for the quarter and year, respectively.
The Company expects amortization of acquired intangibles to be approximately $14.3 million in the first quarter and $55.9 million for 2013, as compared to the 2012 actuals of $5.8 million and $38.1 million for the quarter and year, respectively.

The Company expects net interest expense to be approximately $37.8 million in the first quarter and $151.7 million (approximately $139.3 million on a cash basis) for 2013, assuming no changes in the current interest rate yield curve or changes in debt levels based on the assumptions discussed in this "Outlook" section. This compares to the 2012 actuals of $27.4 million and $128.40 million ($117.5 million on a cash basis) for the first quarter and year, respectively.

The Company expects a current tax provision from continuing operations of approximately $7.9 million and $38.6 million in the first quarter and for the full year 2013, respectively, based on the assumptions discussed in this "Outlook" section. The Company expects the effective tax rate to be approximately 36.3% and 36.2% for the first quarter and 2013, respectively. The Company expects to pay cash taxes of $43.5 million for 2013.

The Company expects to spend approximately $9.9 million in capital expenditures in the first quarter and approximately $39.0 million for 2013. The 2013 estimate assumes $3.8 million related to the Acquisitions.

For earnings history and earnings-related data on Sinclair Broadcast Group, Inc. (SBGI) click here.




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