Tribune Profit Falls on Tax-Ruling Charge

By: (AP) Publishing and broadcasting company Tribune Co. on Thursday said earnings fell sharply in the third quarter because of a charge from a federal tax ruling that went against the company.

Tribune, which owns the Chicago Tribune and other newspapers, as well as the Chicago Cubs baseball team and stakes in several TV stations, said net income available to common shareholders fell 82 percent to $21.9 million, or 7 cents per share, from $119.6 million, or 37 cents per share, a year earlier. Revenue fell almost 1 percent to $1.40 billion from $1.41 billion in the 2004 quarter.

Results for the latest quarter included a charge of 48 cents per share related to a federal court ruling last month that disallowed a tax-free reorganization of the Matthew Bender division, a former unit of Times Mirror, which Tribune acquired in 2000. The quarter also included a gain of 5 cents per share related to calculating the value of certain derivatives. As a result, one-time items resulted in a loss of 43 cents per share in the latest quarter.

Analysts surveyed by Thomson Financial were expecting a profit of 48 cents per share, excluding one-time items, and revenue of $1.4 billion.

Revenue at Tribune's publishing division, which also includes the Los Angeles Times and Newsday, was essentially flat at $980 million. Advertising revenue rose slightly, helped by 7 percent growth in classified ads, but circulation revenue dropped as paid circulation dropped for both weekday newspapers and Sunday deliveries. Operating profit at the publishing division rose 29 percent to $170 million, as operating expenses fell by 5 percent due to the absence of a 2004 charge of $55 million related to misstated circulation at Newsday and Hoy, New York.

Broadcasting and entertainment revenue declined 2 percent to $422 million, and operating profit at the division fell 6 percent to $131 million. Operating profit at the television segment plunged 23 percent, due in part to softness in movie, telecom and automobile advertising. Last Friday, Tribune disclosed that broadcasting group President Patrick Mullen had resigned for undisclosed reasons.