Tribune's Q3 falls below the fold
Profit, revenue slide, but results top Street estimatesMedia firm Tribune, which is expected to go private by year's end in an $8.2 billion buyout deal, posted a lower third-quarter profit Wednesday.
The company, set to be bought by Chicago real estate tycoon Sam Zell, said its profit fell 7% compared with a year ago to $152.8 million, less of a drop than Wall Street expected.
Revenue fell 4.1% to $1.28 billion as advertising revenue in the company's publishing unit declined 9% while broadcasting and entertainment revenue rose 3% to $406 million.
Tribune chairman, president and CEO Dennis FitzSimons said Wednesday that management expects the buyout to close in the current quarter despite investor concerns that the debt-laden deal could fall apart amid the weak debt markets.
"Our third-quarter results reflect a combination of better revenue trends, strong expense controls and an increase in equity income," FitzSimons said. "Publishing revenue trends improved slightly in the third quarter despite the impact of the housing slump on our Florida and California newspapers. We are also encouraged by positive national advertising trends, led by improved Tribune Media Net sales."
As far as Tribune's TV stations are concerned, things are looking good, according to management, which did not hold an earnings call because of the upcoming buyout.
"In television, ad revenue improved as the quarter progressed," FitzSimons said. "New York finished the quarter strong on higher ratings from new syndicated programming and the CW network's fall launch. Chicago also had a good September thanks in part to Chicago Cubs telecasts." The Los Angeles broadcast market was down for Tribune, while New York was up.
Operating income in the TV unit jumped 18% to $87 million in the latest quarter.
For the first nine months of the year, Tribune's operating profit for its radio, TV and entertainment assets is up 0.4% to $286.9 million. Revenue is up 1.2% to $1.1 billion.
The company's publishing assets, however, are running behind 2006 trends. Revenue is off 7.3% at $2.7 billion, while operating profit is off 30.1% to $365.2 million.
Tribune shares closed up 2.3% on Wednesday at $28.18, giving the company a market capitalization of $3.34 billion. During the past year, the stock has traded between $22.78 and $33.99.
Barrington Research Associates analyst James Goss upgraded Tribune shares to "market perform" this week, citing the recent share price weakness amid concerns that the buyout might not happen.