“Sinclair reported a strong third quarter with revenues exceeding the high-end of our guidance ranges and adjusted EBITDA exceeding the mid-point of our guidance for the quarter by 40%,” Chris Ripley, the President/Chief Executive Officer of Sinclair Inc. shared in prepared comments released just minutes before a Thursday afternoon call to discuss the results with debtholders, shareholders and Wall Street analysts.
Indeed, Sinclair’s earnings surpassed analysts’ forecasts, even as the company’s adjusted EBITDA and adjusted Free Cash Flow each dipping year-over-year.
Those two figures are key to understanding Sinclair’s fiscal health in the three-month period ending September 30, and for Sinclair, adjusted EBITDA dipped to $141 million from $198 million. Adjusted FCF fell to $47 million, from $170 million.
The majority of Sinclair’s revenue comes from its Local Media arm, and in Q3, total revenue for local media dipped to $697 million from $781 million. This was partially offset by a small gain at the Tennis Channel cable network, with revenue jumping to $59 million from $54 million. Notably, Distribution revenue slipped to $365 million from $381 million as Advertising dollars dipped to $292 million from $367 million. The difference in political revenue? This year some $11 million is attributed to political, while in Q2 2022 it was $88 million.
Put it all together, and Sinclair’s consolidated revenue fell to $763 million from $843 million in Q3. The seven analysts polled by Yahoo! Finance anticipated revenue in Q3 of $755.18, with the highest prediction coming in at $760 million.
On tough comps thanks to strong political advertising in Q3 2022, Sinclair in the most-recent quarter of 2023 swung to a net loss of $46 million (-$0.74 per share), from net income of $21 million ($0.32 per share) a year ago.
While the EPS finish came within the range of 5 analysts polled by Yahoo! Finance, the consensus earnings per share was -$0.53 for Q3.
Ripley also noted ahead of the earnings call that the company priority “remains to strengthen our balance sheet while acting opportunistically when market conditions permit.”
He also noted that political advertising is at record levels for a non-election year, and that Sinclair expects that trend to continue in the fourth quarter as well as the 2024 Presidential election year.
SINCLAIR BOARD OKs DIVIDEND
Sinclair’s Board of Directors has declared a quarterly cash dividend of $0.25 per share on the company’s Class A and Class B common stock. The dividend is payable on December 15 to the holders of record at the close of business on December 1.
