(AP) Tribune Co., publisher of the Chicago Tribune and Los Angeles Times, posted a net loss of $101.6 million in the first quarter due to a charge associated with new accounting rules.
Excluding one-time items, the results beat analysts’ expectations. Tribune said business is beginning to improve at its newspaper and television properties, and the company is optimistic that the advertising market is strengthening.
“Tribune is well prepared for an economic recovery,” chief executive John Madigan said in a statement. “Right now, business is looking a little bit better and the gradual improvement we are seeing at both our newspapers and television stations gives us confidence that the advertising market is strengthening.”
Tribune’s first-quarter loss, which was equivalent to 36 cents a share, compared with year-earlier net income of $70.6 million, or 21 cents a share. The latest results included an after-tax charge of $165.6 million related to the write-down of intangible assets associated with its acquisition of Times Mirror two years ago.
Under new accounting rules, goodwill — usually the premium paid for an acquisition above the value of the tangible assets acquired — can no longer be written off gradually. Instead, companies must periodically weigh the value of their investment in the acquired company and write off any reduction in value.
Excluding the charge, as well as restructuring charges and investment gains and losses in both periods, Tribune earned $91.9 million in the first quarter, or 32 cents a share, up from $65 million, or 19 cents a share, reported a year earlier.
Analysts surveyed by Thomson Financial/First Call had expected earnings excluding items of 29 cents a share. Tribune shares were up 58 cents at $45.66 in morning trading on the New York Stock Exchange.
First-quarter revenue slipped 4.6% to $1.23 billion from $1.29 billion.
Tribune, which also owns television stations and the Chicago Cubs baseball team, said publishing revenue fell 5.8% to $932 million. Retail advertising revenue slipped 3%, as increases from food-store and home furnishings ads helped mitigate declines in ads from department stores, health care, electronics, and hardware.
Revenue for the broadcasting and entertainment unit declined 2.1% to $284 million, while television revenue slipped 3% to $256 million.
Cost-cutting measures resulted in lower interest expense and trimmed cash operating expenses by 5% during the quarter, helping to offset the decline in revenue. The company plans no further restructuring in 2002.
Tribune now expects operating earnings per share for the second quarter and full year to be toward the upper end of the range of analysts’ estimates. Analysts surveyed by First Call are currently projecting second-quarter earnings of 38 cents to 44 cents a share, and full-year earnings of $1.36 to $1.58 a share.
The company earned 24 cents a share, excluding items, in the second quarter last year and 72 cents a share for the full year 2001.
Separately, Tribune on Friday said it agreed to acquire WTTV-TV in Indianapolis and satellite station WTTK-TV in Kokomo, Ind., from Sinclair Broadcast Group Inc. for $125 million. The transaction will be structured as an asset exchange funded with the proceeds from the sale of certain Tribune radio assets in Denver to Entercom Communications Corp. Entercom is currently managing the Denver radio stations for Tribune.
“We have stated our intention to be a consolidator in television, and this is another step in that direction,” Chief Operating Officer Dennis FitzSimons said in a statement.
Tribune publishes 11 newspapers and owns 23 television stations in large markets.
On the Net: www.tribune.com