Sinclair Broadcast 2025 Q1 Earnings Misses Targets with Net Income Falling Sharply

Sinclair Broadcast (SBGI) reported its fiscal 2025 Q1 earnings on May 7th, 2025. The company missed expectations with a quarterly loss of $2.30 per share, reflecting a sharp decline from the previous year's earnings of $0.35 per share. The net income also plummeted to a loss of $154 million from a profit of $25 million in Q1 2024. Sinclair's guidance adjustment indicates a cautious outlook amidst macroeconomic uncertainties, with expectations of a slight growth in distribution revenues but a decline in core advertising revenue. The company's strategic focus remains on transforming its Ventures portfolio and capitalizing on future political advertising opportunities.

Revenue

Sinclair Broadcast's total revenue decreased by 2.8% to $776 million in Q1 2025, down from $798 million in the same period last year. The Local Media segment contributed $694 million, while the Tennis segment generated $68 million. Other segments brought in $21 million, offset by corporate adjustments of -$7 million, resulting in consolidated revenues of $776 million.

Earnings/Net Income

Sinclair Broadcast swung to a loss of $2.30 per share in Q1 2025 from a profit of $0.35 per share in the previous year, marking a significant 757.1% negative change. The company reported a net loss of $154 million, a deterioration of 716.0% from the $25 million net income in Q1 2024. The results highlight a challenging quarter with disappointing EPS performance.

Price Action

The stock price of Sinclair Broadcast edged down 0.76% during the latest trading day, jumped 8.96% during the most recent full trading week, and increased 13.86% month-to-date.

Post Earnings Price Action Review

Over the past five years, the strategy of purchasing Sinclair Broadcast shares after a revenue drop and holding them for 30 days has resulted in poor performance. The strategy yielded a return of -15.75%, significantly underperforming the benchmark return of 51.97%, with an excess return of -67.72%. The compound annual growth rate was -3.61%, indicating substantial losses. Moreover, the strategy demonstrated a high maximum drawdown of -43.90% and a Sharpe ratio of -0.18, reflecting significant risk and negative returns. These figures suggest that investors have faced considerable challenges with this approach, highlighting the need for a more effective investment strategy.

CEO Commentary

Christopher Ripley, President & CEO, stated that Sinclair is off to a solid start in 2025 despite macroeconomic uncertainties. He highlighted that total media revenue met expectations, with core advertising performances among the strongest in the broadcast sector. While distribution revenues grew year-over-year, they fell slightly below guidance due to ongoing subscriber churn. Ripley emphasized the strategic transformation of the Ventures portfolio towards majority-owned assets and expressed optimism about upcoming political advertising opportunities in 2026, indicating a positive outlook for future growth despite current challenges.

Guidance

For Q2 2025, Sinclair expects consolidated media revenues to decline year-over-year, primarily due to lower political revenues in a non-election year. Local Media core advertising revenue is anticipated to be down approximately 2%, while distribution revenues are forecasted to grow by 1%. The consolidated adjusted EBITDA is guided to be within a range of $91 million to $107 million. The full-year guidance reflects lower cash tax payments estimated at $121 million, significantly reduced from previous forecasts.

Additional News

Sinclair recently appointed Jeff Blackburn as Chairman and CEO of Tennis Channel, reflecting a strategic leadership change. Furthermore, the company declared a quarterly cash dividend of $0.25 per share on May 7, 2025, maintaining its commitment to returning value to shareholders. Sinclair also announced the groundbreaking sponsorship partnership with ATP, WTA, and U.S.-based tennis tournaments, strengthening its position in the sports broadcasting sector. These developments indicate Sinclair's focus on leadership, shareholder returns, and strategic partnerships to drive future growth.