Newspaper earnings to start Wednesday

By David B. Wilkerson, MarketWatch
Last Update: 11:26 AM ET Jul 11, 2006

Several companies report on Thursday prior to the opening bell. Tribune Co. (TRB), embroiled in a battle with its biggest shareholder over the company's strategic direction, is expected to post second-quarter earnings of 56 cents a share on revenue of $1.46 billion. A year ago, its profit was 73 cents a share on revenue of $1.46 billion.

Tribune, trying to revive a stock that has lost nearly half of its value since 2004, announced a plan in May to buy back up to 75 million common shares, worth about $2 billon. Most of those shares were to be repurchased using a Dutch tender offer, under which stockholders could tender some or all of their stock in a range between $28 and $32.50 each.

The Chandler Trusts, which own more than 14% of Tribune Co.'s outstanding shares, objected to the plan, saying it was indicative of the company's failure to respond to fundamental challenges faced by the entire newspaper industry. The trusts recommended that Tribune either spin off its broadcasting division or pursue other alternatives, including a possible sale.

Tribune completed the Dutch tender in late June, and reiterated its plans to sell at least $500 million in non-core assets, look for more opportunities to cut costs, and find ways to keep growing its online properties.

Some analysts say, however, that the Chandlers may be able to find support for their contention that Tribune needs to take more drastic measures to boost shareholder value, and that the resulting pressure could force the company to act more aggressively than it would otherwise.

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