Tribune Media Third-Quarter Earnings Exceed Expectations
The entertainment company led by CEO Peter Liguori was created via the split of Tribune Co.
Tribune Media, the entertainment company that was created by the recent split of the Tribune Co., on Tuesday reported better than expected third-quarter earnings.
Tribune Media is led by CEO Peter Liguori who previously held senior executive roles at Fox and Discovery Communications. He touted the company's outlook on an earnings call Tuesday, including expectations for growing retransmission consent fees, increased original programming at WGN America, and upside in the company's entertainment meta-data business.
Discussing what Tribune Media was now, he described it as a "diverse, modern media company." While it's sometimes been called a local broadcast company, he said that was "a misnomer." Tribune Media "is clearly more than a pure-play" broadcasting company, he said.
Liguori said the latest quarter showed "continued progress" on the company's strategies, such as its revenue diversification beyond core local advertising revenue, which accounted for 62 percent of its total revenue in the latest quarter. Original programming, such as Salem and Manhattan, is one key focus, Liguori emphasized. But he said that it would take time for originals to translate into financial results.
"We have a three- to five-year horizon" to transform WGN America into a general entertainment network with more original programming and cable carriage deals, he said.
Discussing trends on Fox station affiliates in the latest quarter, he cited "softness in Fox's primetime ratings" but added that "we have every confidence that the Fox team is focused on delivering improved programming results."
"We are pleased to see many of the long-term initiatives we have put in place since early 2013 begin to take shape," the CEO said in the earnings report before the call. "Our recently achieved scale has put us in a competitive position to drive affiliate fees, expand our capabilities to maximize political advertising revenues, and fortify our relationships with our network partners. The strong cash flows generated by our business have enabled us to develop a general entertainment cable network, pursue a content ownership strategy and invest in building our data business. I am confident that the combination of our media assets and strong operational focus will keep us on the path for continued success."
The company is also eyeing a move of its stock to a major exchange.
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. Tribune Publishing operates the Los Angeles Times, Chicago Tribune, Orlando Sentinel and other newspapers, as well as local news services.
The company's quarterly earnings amounted to $38.0 million, or 38 cents per share, compared with $49.8 million in the year-ago period, on revenue of $474.9 million, up 69 percent. The most recent quarter included an interest expense of $39.2 million, compared with $9.6 million last year. Analysts had expected earnings of $30.84 million, or 31 cents per share, and revenue of $432.2 million.
The earnings report listed certain businesses as discontinued operations due to the split. Earnings from continuing operations came in at $52.9 million, or 53 cents per share, compared with $39.2 million in the year-ago period. Operating expenses rose 79 percent to $419.6 million.
After a third-quarter drop in advertising of 5.9 percent, the fourth quarter is likely to show a less pronounced drop, management said..
Nov. 11, 5:30 a.m. Updated with earnings conference call information.
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