By: Dave Carpenter, AP Business Writer
(AP) The protracted slump in the economy and the advertising business sent fourth-quarter operating profits sharply lower at Tribune Co.
Tribune, whose holdings include 23 television stations, 11 daily newspapers, and the Chicago Cubs baseball team, said Thursday that revenues were down 13% from a year earlier as the slowdown affected operations virtually across the board.
Tribune posted net earnings in the quarter of $106.8 million, or 32 cents a share, up from $39.7 million, or 11 cents a share, a year earlier. The increase was due to a $74.9 million profit from the sale of AOL Time Warner stock and a $41.8 million gain on derivatives.
But excluding non-operating items — among them, $6.9 million in restructuring charges — income fell 45% to $69 million, or 21 cents a share. While down from 36 cents a share the previous year, that was 2 cents better than the consensus estimate of Wall Street analysts surveyed by Thomson Financial/First Call.
Tribune shares rose 36 cents to $38.10 Thursday afternoon on the New York Stock Exchange.
Revenues sank to $1.32 billion from $1.51 billion. In its publishing division, which includes the Chicago Tribune and Los Angeles Times among other newspapers, revenues fell to $983 million from $1.1 billion a year earlier in a reflection of the falloff in retail and classified advertising.
“The downturn in the economy and a difficult advertising environment made this a challenging year for us,” said John Madigan, Tribune chairman and chief executive officer. “The tragic events of Sept. 11 increased our newsgathering costs and tested our people.”
Executives said the effects of a voluntary retirement program, staff reductions, and pay cuts, all enacted last year, have enabled Tribune to better control costs and should produce slight earnings growth in 2002, despite flat revenues.
Analyst James Goss of Barrington Research Associates said 2002 will be a transitional year for Tribune.
“This year should be one of moderate gains, with the degree of gains depending on the degree of the economic recovery,” he said. “Advertising’s rebound will be linked to the economic rebound.”
For the full year, net income was $84.3 million, or 28 cents a share, down from $201.4 million, or 99 cents a share, in 2000. Revenues rose to $5.25 billion from $4.95 billion, a 6% increase.