Tribune Media Posts Higher Fourth-Quarter Financials, Unveils Dividend
The company, led by CEO Peter Liguori, saw improved ad revenue trends.
Tribune Media, the entertainment company that was created by last year's split of the Tribune Co., on Friday reported higher fourth-quarter financials and unveiled a $650 million special dividend and plans for a regular quarterly dividend.
Tribune Media, led by CEO Peter Liguori, has been growing retransmission consent fees, increased original programming at WGN America and touted the upside potential in its entertainment meta-data business.
The company's fourth-quarter earnings reached $314.7 million, compared with $67.1 million in the year-ago period. The latest period included a $371.8 million gain on investment transactions, which was mainly related to the company's sale of its stake in Classified Ventures. Operating profit for the fourth quarter 2014 increased by to $163.4 million from $43.4 million.
Adjusted operating cash flow, which some observers see as a key metric for judging the company's financial trends, rose to $211.0 million from $95.3 million. Quarterly revenue of $553.4 million was up 85 percent, driven by higher advertising and affiliate fee revenue.
The earnings figure didn't seem fully comparable to Wall Street estimates. Analysts had expected earnings of $55.25 million and revenue of $424 million.
After a third-quarter drop in advertising of 5.9 percent, the fourth quarter saw stronger trends for Tribune Media. Advertising revenue of $381.4 million was up 13 percent. "Increases in political advertising revenues of approximately $49.4 million were partially offset by declines in core advertising of $7.7 million, or 2.4 percent," the company said.
Quarterly retransmission consent fees of $58.4 million were up 68 percent.
Tribune Media said its board authorized a special cash dividend of $6.73 per share on the company’s Class A and Class B common stock. Holders of warrants will also receive a cash payment of the same amount. The dividend is payable on April 9 to stockholders and warrant holders of record at the close of business on March 25. The aggregate payment the company will make in connection with this special dividend is approximately $650 million.
Tribune Media also said it plans to start paying regular quarterly cash dividends of 25 cents per share in the second quarter.
"Our strong financial and operational results in the fourth quarter and full-year 2014 demonstrate the strength of our strategy to develop Tribune Media into a diverse modern media company," said Liguori. “For 2015, we are well-positioned to increase revenue by building our station group market share and growing substantially our retransmission consent and carriage fees. Importantly, we are accomplishing this in an off-cycle political year."
Liguori said at the start of the company's earnings conference call that his management team was "incredibly excited" about where the business stands and is going. "We are bullish on the prospects of our business," he said in wrapping up his prepared remarks.
In 2015, the company expects "solid" revenue growth despite it being an off-cycle political advertising year. Adjusted operating cash flow will drop as it will be "impacted by the cyclical loss of political advertising, continued measured programming investment in WGN America and increased operational costs in our digital and data segment," among other things. All this will bring 2015 revenues to $2.00 billion-$2.03 billion, compared with $1.95 billion in 2014, Tribune Media said. Adjusted operating cash flow of $607.8 million in 2014 will decline to $480 million-$495 million in 2015, the firm said.
Tribune Media consists of 42 owned or operated broadcast stations; national entertainment network WGN America, which has had success with original drama 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.
Also on Friday's call, Liguori once again lauded investments in original programming, such as Manhattan, in which the company also has a stake, which will yield financial benefits starting this year, he said. He said investments in increased local news offers also provide upside as does the company's focus on local sports content, such as in New York, where it offers baseball.
Asked about M&A, he said "we are going to continue to look at opportunities" that would help the company execute its long-term plans, but will always do so with financial rigor.