Tribune Media Earnings Driven by Retransmission, Carriage Fee Gains

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The company says it remains on track to close its sale to Nexstar late in the third quarter.

Tribune Media, which owns 42 TV stations and cable network WGN America and has agreed to be acquired by broadcasting giant Nexstar Media Group for $4.1 billion, reported better-than-expected first-quarter earnings, driven by higher retransmission and carriage fee revenue.

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

During the first quarter, earnings reached $113.2 million, or $1.27 per share, compared with $141.2 million, or $1.60 a share, in the same period of 2018. Adjusted for various items, earnings per share reached 60 cents, up from 51 cents in the year-ago period and ahead of Wall Street estimates. 

Quarterly operating profit came in at $54.7 million, compared with $187.3 million for the first quarter of 2018, "primarily due to the absence of the net pretax gain on the sales of spectrum" recorded in the year-ago period, the firm said. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), another profitability metric, fell 6 percent to $112.5 million.

First-quarter revenue rose 3 percent to $455.0 million driven by a 9 percent gain in retransmission and carriage fee revenue, while core advertising revenue climbed 1 percent.

"The first quarter of 2019 continued the positive momentum established by Tribune Media in the second half of last year," Kern said. "We're very pleased with the progress being made toward closing our previously announced transaction with Nexstar, which has announced its plans to divest certain TV stations and filed its applications for license transfers with the Federal Communications Commission. The FCC has started the clock on its review of the transaction and we remain on track for closing late in the third quarter."

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.