Tribune Media Earnings Driven by Political Ad, Carriage Fee Growth

Tribune Media's WGN America

The company has agreed to be acquired by broadcasting giant Nexstar Media Group for $4.1 billion.

On Friday, Tribune Media, which has agreed to be acquired by broadcasting giant Nexstar Media Group for $4.1 billion, reported better-than-expected fourth quarter earnings, driven by higher carriage fee and political advertising revenue.

Tribune Media CEO Peter Kern and his team won't hold a conference call with analysts due to the pending deal.

During the fourth quarter, earnings from continuing operations of $132.8 million were compared to a profit from continuing operations of $332.8 million in the same period of 2017, which included a $256 million one-time tax benefit. Adjusted earnings per share rose from 81 cents to $1.55, exceeding Wall Street estimates.

Quarterly operating profit came in at $166 million, compared with $123.4 million for the fourth quarter of 2017. Television and entertainment operating profit for the quarter jumped 45 percent to $184.4 million as higher revenue was only partially offset by increases in programming, compensation and other expenses. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), another profitability metric, rose 38 percent to $233.3 million.

Fourth quarter revenue rose 18 percent to $578.7 million. Political advertising revenue rose 82 percent compared with the year-ago quarter, carriage fee revenue was up 23 percent in the period and retransmission revenue increased 10 percent, which was partially offset by a decrease in core advertising revenue of 4 percent.

"We reported record consolidated revenue and adjusted EBITDA for both the fourth quarter and full year 2018, powered by exceptionally strong political advertising revenues, significant growth in retransmission and carriage fee revenues and a meaningful contribution to our operating results from our cable network, WGN America," Kern said. "We continue working closely with Nexstar to gain regulatory approval of the transaction and look forward to its anticipated closing later this year."

Sinclair Broadcast Group's $3.9 billion planned takeover of Tribune Media, which would have created a local TV giant reaching nearly two-thirds of U.S. TV households, was scrapped last summer after a series of developments that cast doubt over the transaction.