Tribune Profits Soar 87%

By: Dave Carpenter, AP Business Writer (AP) The nationwide resurgence in advertising spending plus lower newsprint costs helped Tribune Co.'s fourth-quarter profits jump 87%.

The media giant's earnings report released Wednesday reflected a much-improved advertising climate for both its television and newspaper groups.

Tribune, whose holdings include 12 daily newspapers, 24 television stations, and the Chicago Cubs baseball team, reported net income of $187 million, or 57 cents a share, compared with $100.1 million, or 47 cents a share, a year earlier.

Excluding certain items in both years, including restructuring charges in 2001, Tribune said operating earnings rose 21%, also to 57 cents a share. That was 3 cents higher than the consensus estimate of analysts surveyed by Thomson First Call.

Revenue rose 8% to $1.43 billion from $1.32 billion.

With the industry continuing to pull out of a two-year advertising slump, Chairman John Madigan said the company's businesses "established real momentum heading into 2003" and Tribune reiterated its expectation that operating earnings will grow in the low double-digit range this year.

"Our results clearly demonstrated the strength and resiliency of our local mass media franchises," said Dennis FitzSimons, president and chief executive officer. "In difficult times, advertisers rely on media that deliver results."

Operating revenue from the publishing business, comprised of the Chicago Tribune, Los Angeles Times, Newsday, and other dailies, increased 31% to $242 million. The rebound in ad spending was a primary contributor -- retail advertising climbed by 6% for the quarter, national advertising was up 14% and classifieds rose by 4%.

Another boost came from an 18% drop in Tribune's newsprint and ink expenses. Newsprint, the second-largest cost for newspaper companies, cost 19% less than a year earlier amid a comparatively weak advertising market and reduced demand for paper.

A 23% jump in TV advertising revenues helped the broadcasting unit post 31% higher operating profits, at $131 million.

Tribune's smaller interactive business, meanwhile, reduced its operating loss for the quarter to $1.6 million from $5 million a year earlier.

Richard Read, an analyst for Credit Lyonnais Securities in New York, said that while Tribune's success remains dependent upon the economic recovery, it was a strong quarter. "From the standpoint of cost structure and getting the operation in shape, they're doing a lot of good things," he said. "They're poised to be at the nexus of TV station consolidation over the next couple of years."

James Goss of Barrington Research Associates said the results were better than he expected.

"The most important thing is that newspapers are doing reasonably well and starting to recover, even in the parts that have been tough" -- such as employment classifieds, which were down but improved, Goss said. He also said broadcasting "should be a strength for them this year."

For the year, net income was $416.8 million, or $1.30 per share, up from $84.3 million, or 28 cents a share, in 2001. Revenues increased 2% to $5.38 billion from $5.25 billion.

Tribune shares rose 96 cents to close at $48.94 on the New York Stock Exchange Wednesday, just off the three-year high of $49.49 reached in late October.