Financial Performance - Sinclair's preliminary unaudited Local Media segment media revenues for Q4 2024 are reported, but specific figures are not disclosed yet[6] - The financial closing procedures for Q4 2024 are incomplete, indicating that final results may differ from preliminary estimates[7] - The preliminary financial information should not be viewed as a substitute for full financial statements prepared in accordance with GAAP[7]

Company Overview - Sinclair Inc (NASDAQ: SBGI) is developing new in-depth stories and offering unique links with local communities that smaller competitors cannot provide [1] - The company's business model may benefit from the growing importance of politics [1] Analyst Background - The analysis is provided by an ex-investment banker with approximately 11 years of industry experience [1] - The analyst focuses on value investments, typically targeting companies trading at around 10x earnings with dividend yields [1] - Research coverage includes small and mid-cap companies across the United States, Canada, South America, UK, France, and Germany [1] Analyst Position - The analyst holds a beneficial long position in SBGI shares through stock ownership, options, or other derivatives [2] - The analysis represents the analyst's personal opinions and is not compensated by the company [2]

Financial Performance - In Q3 2024, Sinclair's total revenues increased to $917 million, up 19.5% from $767 million in Q3 2023[278] - Media revenues rose to $845 million in Q3 2024, a 21% increase compared to $697 million in Q3 2023[280] - Political advertising revenue surged by $127 million in Q3 2024, reflecting a significant increase due to the presidential election year[283] - Operating income for Q3 2024 was $179 million, compared to $37 million in Q3 2023, marking a substantial improvement[278] - Net income attributable to Sinclair reached $94 million in Q3 2024, a recovery from a loss of $46 million in Q3 2023[278] - Media revenues for the three months ended September 30, 2024, increased to $845 million, up 21.3% from $697 million in the same period of 2023[307] - Total revenues for the nine months ended September 30, 2024, were $2,322 million, compared to $2,213 million for the same period in 2023, reflecting a growth of 4.9%[307] - Operating income for the three months ended September 30, 2024, was $182 million, significantly higher than $44 million in the same period of 2023[307] - Net income attributable to SBG for the three months ended September 30, 2024, was $80 million, compared to a loss of $22 million in the same period of 2023[307] Revenue Breakdown - Distribution revenue grew by $18 million or 5% in Q3 2024, driven by contractual rate increases despite a decrease in subscribers[281] - Distribution revenue increased by $2 million (4%) and $14 million (10%) for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023[292] - Core advertising revenue decreased by $1 million (11%) for the three months ended September 30, 2024, while remaining flat for the nine months compared to the same period in 2023[293] - Media programming and production expenses increased by $13 million (approximately 8.5%) and $38 million (approximately 10.5%) for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023[286] - Media selling, general and administrative expenses rose by $24 million (approximately 10.5%) for the three months and $35 million (approximately 11.5%) for the nine months ended September 30, 2024, compared to the same periods in 2023[287] - Non-media revenues increased by $3 million (approximately 14%) for the nine months ended September 30, 2024, compared to the same period in 2023, primarily due to an increase in broadcast equipment sales[298] Cash Flow and Capital Management - As of September 30, 2024, SBG had net working capital of approximately $238 million, including $202 million in cash and cash equivalents[317] - Sinclair anticipates that existing cash and cash equivalents and cash flow from operations will be sufficient to meet debt service obligations and working capital needs for the next twelve months[321] - Net cash flows from Sinclair's operating activities increased to $226 million for the three months ended September 30, 2024, compared to $50 million in the same period in 2023, driven by higher cash collections related to political revenue and Distributors[325] - For the nine months ended September 30, 2024, net cash flows used in operating activities increased to $(86) million, primarily due to the DSG settlement payment and increased production costs, despite higher cash collections[326] - Net cash flows used in financing activities decreased to $(74) million for the three months ended September 30, 2024, compared to $(111) million in the same period in 2023, primarily due to reduced debt repayment[329] - For the nine months ended September 30, 2024, net cash flows used in financing activities decreased to $(11) million, influenced by the repurchase of outstanding Common Stock and a decrease in debt repayment[330] Corporate Actions and Developments - Sinclair expanded its podcast division with new sports programming in August and September 2024[268] - The company launched the Rip City Television Network in October 2024, enhancing its market presence in the Pacific Northwest[268] - Sinclair declared a quarterly dividend of $0.25 per share in August and November 2024[273] - Sinclair declared a quarterly dividend of $0.25 per share in August 2024 and November 2024, with future dividends subject to the Board's discretion based on various financial factors[331] - Sinclair agreed to a global settlement involving a cash payment of $495 million related to litigation, with $445 million paid in the second quarter of 2024[322] Tax and Accounting - The effective tax rate for the three months ended September 30, 2024, was a provision of 23.0%, compared to a benefit of 20.7% during the same period in 2023[302] - The effective tax rate for the nine months ended September 30, 2024, was a provision of 17.4%, compared to a benefit of 134.3% during the same period in 2023[303] - The effective tax rate for the three months ended September 30, 2024, was a provision of 22.8%, compared to a benefit of 18.9% in the same period of 2023[313] - There were no changes to critical accounting policies and estimates from those disclosed in the previous annual report[339] Investments and Equity - Income from equity method investments recognized a gain of $93 million during the nine months ended September 30, 2024, compared to a gain of $33 million in the same period of 2023[300] - Sinclair and SBG increased estimated contractual amounts owed for network programming rights by $1,592 million, with terms extending into 2027[320]

Financial Data and Key Metrics Changes - The company reported total distribution revenue in line with guidance, with core advertising revenues growing by 1% in Q3, marking the first growth in core advertising during a high political advertising period [8][30] - Adjusted EBITDA for Q3 was $249 million, reflecting a 72% year-over-year increase driven by stronger political and distribution revenues [34][35] - Consolidated media revenues reached $908 million, up 20% year-over-year, primarily due to higher political revenue and distribution revenues [32][46] Business Line Data and Key Metrics Changes - Political advertising revenue for Q3 was $138 million, an all-time high for the quarter, despite $5 million in late cancellations [23][30] - Tennis Channel's media revenues increased by 2% year-over-year, with distribution revenues growing by 4%, although advertising revenues fell by 7% [36] Market Data and Key Metrics Changes - Broadcast market share of viewing minutes increased by 230 basis points over the past two months, driven by live sports content [15][16] - The company noted that broadcast television continues to be a dominant medium for political advertising, with expectations for strong performance in upcoming elections [25][47] Company Strategy and Development Direction - The company is optimistic about the regulatory environment, anticipating modernization of regulations that could facilitate M&A activities [51][63] - Sinclair is focused on leveraging its strong operational performance and the broader broadcast industry's strength to capitalize on future opportunities [47] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of late political ad cancellations but remains optimistic about the upcoming political season and the potential for increased revenues [7][25] - The company expects to finish the year with core advertising down only 2%, which is significantly better than historical declines during political years [40][42] Other Important Information - The company launched two sports-related podcasts that have ranked among Apple's top 10 sports podcasts, indicating a growing interest in digital content [27] - A direct-to-consumer product for the Tennis Channel is set to launch, which is expected to enhance viewership and provide additional revenue streams [29][66] Q&A Session Summary Question: Can you discuss the decision to preannounce on political advertising? - Management explained that shifts in political ad spending led to a lower-than-expected Q4, which was not anticipated based on historical trends [50] Question: Should Sinclair be viewed as a buyer or seller in potential M&A? - Management expressed excitement about the regulatory environment and indicated that the company is open to participating in M&A as a buyer, seller, or merger partner [51] Question: What are the expectations for distribution revenue growth? - Management indicated that there is still room for growth in distribution revenue, with 28% of subscribers yet to renew [52] Question: How are core advertising trends expected to evolve post-election? - Management noted that despite political crowd-out, core advertising is expected to remain stable, supported by strong sports programming [58] Question: Can you provide insights on the regulatory environment and its impact? - Management highlighted the potential for regulatory changes that could benefit the industry, particularly regarding ownership rules [63] Question: What is the outlook for capital allocation and debt management? - Management stated that they are focused on reducing leverage and managing upcoming debt maturities efficiently while exploring M&A opportunities [71][74]

SINCLAIR 111 3Q24 Earnings Presentation November 6, 2024 Published by: Sinclair, Inc. NON-GAAP FINANCIAL MEASURES n Q This presentation contains certain financial measures of Sinclair, Inc. (the "Company"), including Adjusted EBITDA, which are not prepared in accordance with U.S. generally accepted accounting principles ("GAAP") (collectively, the "non-GAAP financial measures"). Adjusted EBITDA is defined as earnings before interest, tax, depreciation and amortization, and non-recurring and unusual transact ...

Core Viewpoint - Sinclair (SBGI) reported quarterly earnings of $1.28 per share, significantly exceeding the Zacks Consensus Estimate of $0.89 per share, and showing a turnaround from a loss of $0.30 per share a year ago, indicating strong performance in the current quarter [1][2] Financial Performance - The company achieved revenues of $917 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 0.98% and reflecting a year-over-year increase from $767 million [2] - Over the last four quarters, Sinclair has consistently surpassed consensus EPS estimates, achieving this four times [2] Stock Performance - Sinclair shares have increased approximately 28.5% since the beginning of the year, outperforming the S&P 500's gain of 21.2% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.92 on revenues of $1.02 billion, and for the current fiscal year, it is $4.57 on revenues of $3.58 billion [7] - The trend of estimate revisions for Sinclair is mixed, which may change following the recent earnings report [6] Industry Context - The Media Conglomerates industry, to which Sinclair belongs, is currently ranked in the top 24% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Revenue Performance - Total revenues for Q3 2024 increased by 20% to $917 million compared to $767 million in the prior year period[8]. - For the nine months ended September 30, 2024, total revenues increased by 10% to $2,544 million compared to $2,308 million in the prior year period[11]. - Total revenues for the three months ended September 30, 2023, were $767 million, a decrease of 6% compared to the previous period[16]. - Total revenues for the three months ended September 30, 2024, were $917 million, a 19.5% increase from $767 million in the same period of 2023[27]. - Media revenues increased to $908 million, up 19.8% from $758 million year-over-year[27]. Advertising Revenue - Core advertising revenues grew by 1% year-over-year, totaling $295 million, while total advertising revenues increased by 42% to $433 million[2][8]. - Political revenues reached $138 million, a 31% increase over 2020 levels, despite $5 million in lost revenue due to late ad cancellations[2][3]. - Core advertising revenue for the twelve months ending December 31, 2024, is projected to be between $1,210 million and $1,219 million[23]. EBITDA and Income - Adjusted EBITDA for Q3 2024 increased by 72% to $249 million from $145 million in the prior year period[9]. - Adjusted EBITDA for the same period was $145 million, reflecting a decrease of 11%[16]. - Operating income for the three months ended September 30, 2024, was $179 million, compared to $37 million in the same period of 2023, representing a significant increase[27]. - Adjusted EBITDA for the three months ended September 30, 2024, was $249 million, up from $145 million in the same period of 2023[32]. - Net income attributable to Sinclair for the three months ended September 30, 2024, was $94 million, compared to a net loss of $46 million in the same period of 2023[27]. - Net income attributable to the Company was $134 million for the nine months ended September 30, 2024, compared to $50 million in the prior year period[12]. Expenses and Costs - Total operating expenses for the three months ended September 30, 2024, were $738 million, slightly up from $730 million in the same period of 2023[27]. - Interest expense for the three months ended September 30, 2024, was $78 million, compared to $77 million in the same period of 2023[32]. - The company incurred $22 million in non-recurring and unusual transaction costs, impacting overall profitability[36]. - Depreciation and intangible amortization expenses totaled $59 million, contributing to the operating income analysis[36]. Cash and Debt - Total company debt as of September 30, 2024, was $4,131 million[18]. - Cash and cash equivalents as of September 30, 2024, amounted to $536 million[18]. - Capital expenditures for the third quarter of 2024 were $17 million[19]. - The company paid a quarterly cash dividend of $0.25 per share in September 2024[19]. Future Projections - The company expects total revenues for the three months ending December 31, 2024, to be between $1,004 million and $1,014 million[22]. - Operating income for the three months ending December 31, 2024, is expected to be between $236 million and $247 million[22]. - Distribution revenue for the twelve months ending December 31, 2024, is expected to be between $1,740 million and $1,742 million[23]. Strategic Initiatives - The Company launched new podcasts and expanded its podcast division, with several shows ranking among Apple's top-10 sports podcasts[4]. - Sinclair Ventures made investments of approximately $7 million in minority investments during Q3 2024[7]. - The company emphasizes the importance of successful execution of outsourcing and retransmission consent agreements for future growth[37]. - There is a focus on identifying and consummating acquisitions to enhance market position and financial leverage[37]. Risks and Challenges - Forward-looking statements highlight potential risks including subscriber decline and regulatory challenges, which may affect future operating results[37]. - The company faces material risks related to programming costs and competition for viewers and advertisers[37]. - Legal and reputational risks are acknowledged, particularly concerning breaches of information systems[37]. - The company has no obligation to publicly release revisions to forward-looking statements except as required by law[37].

Core Insights - Sinclair (SBGI) shows potential as a strong investment due to significant revisions in earnings estimates, indicating an improving earnings outlook [1][2] - The trend of increasing estimate revisions reflects growing analyst optimism about Sinclair's earnings prospects, which is likely to positively impact its stock price [2][3] Current-Quarter Estimate Revisions - For the current quarter, Sinclair is projected to earn $0.93 per share, representing a remarkable increase of +410% compared to the same quarter last year [4] - Over the past 30 days, there has been one upward revision in estimates with no negative revisions, leading to a 9.47% increase in the Zacks Consensus Estimate [4] Current-Year Estimate Revisions - For the full year, Sinclair is expected to earn $4.57 per share, which is a substantial change of +140.62% from the previous year [5] - The current year's estimate revisions are also favorable, with one estimate moving higher and a 21.83% increase in the consensus estimate over the past month [5] Favorable Zacks Rank - Sinclair currently holds a Zacks Rank 1 (Strong Buy) due to positive estimate revisions, which historically correlate with strong stock performance [6] - Stocks with Zacks Rank 1 and 2 have shown significant outperformance compared to the S&P 500 [6] Bottom Line - Strong estimate revisions have led to a 10.7% increase in Sinclair's stock price over the past four weeks, suggesting further upside potential [7]

Shares of Sinclair (SBGI) have gained 2.8% over the past four weeks to close the last trading session at $13.92, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $17.62 indicates a potential upside of 26.6%. The mean estimate comprises six short-term price targets with a standard deviation of $5.18. While the lowest estimate of $13 indicates a 6.6% decline from the current price ...

Momentum investing is essentially an exception to the idea of "buying low and selling high." Investors following this style of investing are usually not interested in betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time. Who doesn't like betting on fast-moving trending stocks? But determining the right entry point isn't easy. Often, these stocks lose momentum once their valuation moves ahead ...