Broadcast Stocks Under Pressure Following Sinclair Broadcast Group's Q3 Warning
Broadcasting company shares are trading down Tuesday after Sinclair Broadcast Group Inc (NASDAQ: SBGI) reduced its media revenue forecast for the third quarter. The company blamed political spending ahead of the elections for reducing its outlook.
The company is looking for media revenue of about $637 million–$638 million for the third quarter, representing 28 percent year-over-year growth. In comparison, the company has earlier guided media revenues between $649.2 and $663.2 million indicating 30.3–33.1 percent growth from the previous year's period.
Significantly, Sinclair reduced its political spending estimate from $58–$68 million to about $46 million. The company maintained its core advertising revenue projection of a low-single-digit percentage growth on a year-over-year basis.
Following the revising in political ad estimate, the company withdrew its full-year political estimate of $260 million–$280 million. The broadcasting firm gave its forecast based on the past two elections' political ad spends.
Sinclair's chief financial officer, Chris Ripley, commented, "While we previously anticipated a decline in Presidential ad spending in the third quarter based on the late fundraising by the Trump campaign, we have yet to see significant spending, even at the levels we initially anticipated."
Following this, other stocks in the broadcasting sector suffered a loss on Tuesday's trading.
At Time Of Writing ...
- E.W. Scripps Co (NYSE: SSP) was down 5.75 percent at $15.41.
- Gray Television, Inc. (NYSE: GTN) was down 8.24 percent at $10.11.
- Nexstar Broadcasting Group, Inc. (NASDAQ: NXST) was down 6.75 percent at $50.71.
- Sinclair was down 6.83 percent at $26.72.
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