Tribune’s 2 Qtr. Hurt By Declining Ad Revenue

NEW YORK — Tribune Co. posted a sharp decline in earnings from operations for the second quarter amid the continued advertising slump and issued a cautious outlook for the third quarter.

The publisher and broadcaster, whose flagship newspapers include the Chicago Tribune and the Los Angeles Times, Thursday reported net income of $72.6 million, or 21 cents a diluted share, compared with $37.8 million, or 13 cents a share, in the year-earlier period.

Excluding discontinued operations and a restructuring charge of $14.3 million, the company earned $82.4 million, or 24 cents a share, compared with $119 million, or 44 cents a share, a year earlier. Analysts surveyed by Thomson Financial/First Call had expected earnings, excluding items, of 22 cents a share.

Revenue increased 1.6% to $1.37 billion from $1.35 billion a year earlier.

Last month, Tribune lowered its second-quarter earnings forecast and announced it would cut its work force by about 6% by year’s end. Prior to that, analysts had expected the company to earn around 28 cents a share for the second quarter.

The company, which also owns television stations and the Chicago Cubs baseball team, at the time cited declining advertising revenue for the lowered outlook and job cuts.
“We are acting aggressively to offset the effects of the slowing advertising environment,” John W. Madigan, chairman, president and chief executive, said Thursday in a written statement. “Our businesses continue to generate substantial cash flow, helped by significant cost-cutting initiatives across the company. We are confident that the moves we are making now will position us well when the economy recovers.”

Operating revenue in the company’s broadcasting and entertainment division fell 7.5% to $387 million. Television revenue fell 10% to $314 million. Actual publishing revenue rose 5.3% to $965.7 million.
On a pro forma basis, which assumes that its June 2000 acquisition of The Times Mirror Co. took place before the year-earlier second quarter, publishing revenue declined 9.9% to $965.7 million. The Times Mirror merger didn’t impact broadcasting and entertainment.

Although newsprint prices increased 8% in the quarter, consumption fell 12%, leading to a 3% decline in newsprint expenses.

Looking ahead Tribune expects third-quarter earnings to be at the low end of analysts’ estimates, which currently range from 15 cents to 28 cents a share.

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