[opendtv] Broadcast TV Stocks Surge
- From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Wed, 9 Feb 2011 15:42:52 -0600
http://www.tvtechnology.com/article/113486
Broadcast TV Stocks Surge
02.09.2011.
MULTIPLE CITIES: TV stocks climbed past the overall market in the last few days
as the sector regains favor with Wall Street. An aggregate index of 26 TV
station stocks have surpassed the Dow Jones, S&P 500 and the NASDAQ this week.
The indices are up around 5 percent for the year, while broadcast stocks are up
more than 9 percent.
"Given the positive commentary on broadcast TV trends from both private and
public contacts, coupled with increasing auto sales... and the likely windfall
from telecom ad spending, we are incrementally positive on the broadcast
space," Wells Fargo analysts wrote this week in a note highlighting Sinclair
(NASDAQ: SBGI).
Sinclair reported fourth-quarter broadcast earnings today of $33 million, or 40
cents per share, on station revenues of $190 million. The Hunt Valley, Md.,
company runs 58 TV stations in 35 markets. It exceeded Wells Fargo's revenue
target of $183 million, and it's own guidance of between $182 million and $186
million. For the full year, Sinclair's TV stations pulled in $655.4 million,
yielding $76.1 million in profit, or 94 cents a share. The company also
announced the reinstatement of its dividend policy this morning.
"SBGI declared nice recurring dividend this morning of 12 cents per quarter, or
48 cents a year, which represents about a 5 percent yield on yesterday's
closing price," Wells Fargo's Marci Ryvicker said. "This reinforces our thesis
on the health of the television broadcast industry in general and why SBGI is
likely to outperform."
Ryvicker and her colleagues raised SBGI's outlook yesterday from "market
perform" to "outperform," saying it had its lowest-ever leverage and the lowest
in the broadcast space. The Wells Fargo team said 2011 is already shaping up to
be one of the best odd-numbered years in the sector. Odd-numbered years are
typically off because of the absence of big spending on elections and Olympics.
The rosy outlook is due in large part to the recovery of the automotive
industry.
"In 2009, only three car brands advertised during the Super Bowl, spending $18
million--the lowest in six years," the Wells Fargo note said. "According to
recent trade publications, this past Sunday's game included a record nine auto
brands from six different parent companies."
Car commercials generated roughly 25 percent of broadcast TV ad revenues before
the recession, and 15 percent during, causing the sector to implode in 2009.
Last year's election revenues finally pulled the TV industry out of the
doldrums. Sinclair reported all-time high political revenues of $41.9 million
for 2010. Automotive was up 37 percent, comprising nearly 18 percent of time
sales.
Among other reporting companies:
Meredith's 12 TV stations reported record political ad revenue of $33.6 million
for the final six months of 2010. Meredith raised its quarterly dividend by 11
percent to 25.5 cents. Citigroup raised it from "hold" to "buy." Zacks raised
it from "neutral" to "outperform," establishing a target price of $38 per
share. Meredith shares (NYSE: MDP) were trading for $34.12 at mid-day, up 14
percent from a year ago.
McGraw-Hill's eight TV stations generated $28.4 million in revenues during last
year's final quarter, up nearly 22 percent from the previous year on strong
political ad sales. Full-year revenues were up 18 percent to $96 million.
Belo's 20 TV stations earned $39.9 million on revenues of $206 million for
4Q10. Political reached a near record of $35.7 million. Full-year profit was
$86.9 million on revenues of $687 million, including $56 million in political
spending. Automotive was up 29 percent for the year. Belo shares were trading
today at $8.05, up 25 percent from one year ago.
Gannett's 23 TV stations generated 4Q10 operating income of $116.3 million--up
47 percent from a year earlier--on revenues of $220 million. Political
contributed $52.4 million. Gannett said TV revenues faced "headwinds in the
first quarter of 2011" without the Olympics or the Super Bowl on NBC, but that
growth in the low single digits was nonetheless expected. Gannett (NYSE: GCI)
was trading today at $17, up 22 percent from a year ago.
Media General's has 18 TV stations, digital and print properties pulled 4Q10
revenues of $189.9 million, "driven by a 29 percent increase in broadcast
revenues, which reflected strong political advertising and an overall firming
in broadcast transactional business," the Richmond, Va., media company said.
Media General (NYSE: MEG) doesn't break out its results by media platform, but
rather by geographic segment. The stock was trading today at $5.84, down 32
percent from a year ago.
Among the broadcast networks reporting, Disney's TV revenues were up 11 percent
to $4.6 billion for the quarter ending Jan. 1, 2011. TV operating income rose
47 percent to $1.1 billion. Disney owns the ABC network and 10 affiliated TV
stations, as well as radio, cable, digital, studio and syndication businesses.
News Corp.'s Fox Broadcasting Company reported its best quarterly profit in
two-and-a-half years for the three months ending Dec. 31, 2010. The TV business
reported operating incomes of $151 million, led by a $121 million
year-over-year increase for the TV stations and the broadcast network.
4Q10 NBC Universal profit was up 38 percent over the previous year, according
to General Electric, which is divesting majority ownership to Comcast.
CBS, Journal, E.W. Scripps and The Washington Post Co. are scheduled to release
earnings reports yet this month.
-- Deborah D. McAdams
----------------------------------------------------------------------
You can UNSUBSCRIBE from the OpenDTV list in two ways:
- Using the UNSUBSCRIBE command in your user configuration settings at
FreeLists.org
- By sending a message to: opendtv-request@xxxxxxxxxxxxx with the word
unsubscribe in the subject line.
Other related posts:
