Tribune Media Profit Falls Amid Higher Programming Expenses
The company exceeded Wall Street estimates though and 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, on Friday reported lower, but better-than-expected second-quarter earnings as higher retransmission and carriage revenue was more than offset by lower political advertising and other revenue, as well as higher programming expenses.
“The increase in programming expense was primarily due to an increase in network affiliate fees mainly due to the renewal of network affiliation agreements in eight markets with Fox Broadcasting Company during the third quarter of 2018,” the company said.
Tribune Media CEO Peter Kern and his team won't hold a conference call with analysts due to the pending Nexstar deal.
Tribune Media's second-quarter earnings reached $63.7 million, or 71 cents per share, compared with $84.4 million, or 96 cents a share, in the same period in 2018. Adjusted for various items, earnings per share reached 79 cents, down from 99 cents in the year-ago period and ahead of Wall Street estimates.
Quarterly operating profit came in at $73.3 million, down 25 percent from the second quarter of 2018 due to higher programming expenses and lower revenue. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), another profitability metric, fell from $160.8 million to $135.4 million.
Second-quarter revenue dropped 1 percent to $484 million driven by a drop in political advertising revenue, while retransmission fees and core and digital advertising revenue climbed.
Sinclair Broadcast Group's $3.9 billion planned takeover of Tribune Media, which would have created a local TV giant reaching nearly two-third of U.S. TV households, was scrapped last summer after a series of developments that cast doubt over the transaction.