Weakness in circulation, retail and auto advertising
By David B. Wilkerson, MarketWatch
Last Update: 9:05 AM ET Apr 13, 2006
CHICAGO (MarketWatch) -- Tribune Co. on Thursday posted a 28% drop in its first-quarter profit on charges related to severance costs, non-operating loss on a decline in the value of certain investments, stock compensation expense and weakness in advertising at its broadcasting division.
Tribune (TRB) said net income slipped to 102.8 million, or 33 cents a share, from $142.8 million, or 44 cents a share.
Operating revenue fell about 1% to $1.3 billion.
Analysts expected Tribune to post a first-quarter profit of 36 cents a share on revenue of $1.3 billion.
Newspaper advertising revenue was flat for the quarter, as strength in classified advertising was offset by a decline in national and retail advertising.
Publishing's first quarter operating revenues were $997 million, down 1%, as cash operating expenses rose 2%, and included a $19 million associated with the new union contracts at Newsday.
"Tight cost controls remain in effect, and our actions in 2005 resulted in a 5% year-over-year staff reduction, or approximately 1,200 positions across the company, and lower compensation expense," Dennis FitzSimons, Tribune chairman, president and chief executive officer said in a statement.
"Looking ahead, our new labor agreements at Newsday will result in significant expense savings, while in TV we expect our affiliation with the CW Network to have a positive impact on revenues later this year," he said.
Broadcasting and entertainment revenue fell 2% to $303 million. First-quarter television revenue fell 2%.
In the 2006 first quarter, Tribune recorded a pretax non-operating loss of $14 million.
In the 2005 first quarter, Tribune recorded a pretax non-operating loss of $4 million.
In addition, the company recorded favorable income tax settlement adjustments of $12 million as a reduction in income tax expense.
In the aggregate, non-operating items in the first quarter of 2005 resulted in an after-tax gain of $9 million, or 3 cents a share.