Tribune Media First-Quarter Earnings Meet Expectations, Revenue Rises 6 Percent
The company, led by CEO Peter Liguori, has been investing in original programming at WGN America.
Tribune Media, the entertainment company that was created by last year's split of the Tribune Co., on Friday reported first-quarter financials.
The company, led by CEO Peter Liguori, has been expanding original programming at its WGN America and seen growing retransmission consent fees.
The company's first-quarter earnings reached 37 cents per share, in line with Wall Street expectations. Revenue rose 6 percent to $472.7 million, slightly below analysts' expectations. The gain was driven by acquisition-related growth in the company's digital and data segment and an increase in its TV and entertainment unit.
Television and entertainment revenue of $410.3 million was up 2.5 percent. Advertising revenue dropped 2 percent from the year-ago period when the Super Bowl aired on more of its stations. Excluding that, ad revenue rose 1.4 percent. Local station retransmission consent fees jumped 24 percent, and carriage fees rose 52 percent as a result of higher rates for WGN America.
Television and entertainment adjusted earnings before interest, taxes, depreciation and amortization dropped to $135.0 million from $139.7 million. Tribune Media said the figure was "unfavorably impacted primarily by an increase in programming expenses associated with new original and syndicated content at WGN America."
"We generated top-line line growth in the first quarter and made progress against many of our key strategic objectives," said Liguori. "First, we grew revenue market share across our stations, including, most importantly, our four largest markets. WGN America successfully continued its conversion from a superstation to a cable network, and the network is telecast as a cable entity to 60 percent of our subscriber base, while generating a 52 percent increase in carriage revenues this quarter."
Liguori added: "Our results in the first quarter and our outlook for the remainder of the year give us confidence that we are on track to achieve our revenue and adjusted [operating cash flow] guidance for the full year."
Tribune Media consists of 42 owned or operated TV stations; national entertainment network WGN America, which has had success with such originals as Salem; Tribune Studios; Tribune Digital Ventures; WGN Radio; real estate properties and strategic investments. The other company created by the Tribune split is Tribune Publishing, which operates the Los Angeles Times, Chicago Tribune, Orlando Sentinel and other newspapers, as well as local news services.
On the earnings conference call, Liguori said the ad market looked resilient. He applauded Fox on the great performance of Empire in the first quarter. Asked if its end would mean a big hit to second-quarter financials, he said the company does not expect a huge impact and highlighted how the firm's focus on expanding its news offerings has boosted financials.
Liguori reiterated past comments that news was "highly profitable" as it comes instead of syndicated programming that costs licensing fees and 50 percent of ad revenue under typical deals. The CEO said the around 70,000 hours of local news that the company currently airs is second only to Sinclair Broadcast among TV station groups. He said the company plans to add more news hours.
Management on Friday also signaled that Tribune Media could make more acquisitions in the digital and data space down the line, but emphasized it would always focus on deals that make financial and strategic sense.