May 20--Tribune Co. said Tuesday that its net income decline by 30 percent in the first quarter, as gains in broadcast revenues were offset by double-digit publishing declines and higher expenses.
Net income was $41.1 million, or 41 cents per share, compared with $58.4 million, or 58 cents per share a year ago. Tribune Co. had an operating profit of $74 million, an 11 percent decline.
Consolidated revenue for the first quarter was $852 million, up 21 percent from the same quarter last year. The acquisition of Local TV increased revenue by nearly $145 million, the Chicago-based media company said Tuesday.
Operating expenses jumped 25 percent to $156 million.
"In the first quarter of 2014 we demonstrated early signs of the strength of our new broadcast scale," Peter Liguori, Tribune Co. president and CEO, said in a statement. "We are also encouraged by the activity we are seeing in the political landscape and its prospects for advertising for the second half of 2014."
Publishing revenue fell 3 percent to $454 million, with the largest declines at the Chicago Tribune, Los Angeles Times and Baltimore Sun. Advertising revenue was down by 8 percent, with retail advertising accounting for most of the decline. Classified advertising was flat and digital advertising increased by 5 percent for the quarter.
Circulation revenue was flat in the first quarter, with higher sales of digital editions offset by print sales declines.
Publishing expenses were down by 1 percent, but operating profit fell 17 percent, or $8 million, compared with the same quarter last year. Tribune Publishing, which includes the Chicago Tribune, Los Angeles Times and six other daily newspapers, is set to spin off as a separate company by midyear.
"Our newspapers continued to deliver very good results in a challenging environment, and we are confident in the prospects for that business as we move closer to spinning it off from Tribune Company," Liguori said in a statement.
Bolstered by last year's acquisition of the Local TV station group, broadcasting revenue was up 67 percent to $398 million. The 19-station group, acquired last December in a $2.73 billion deal, accounted for nearly all of that increase.
Broadcasting advertising revenue increased 59 percent, or $113 million, with the Local TV stations bringing in $116 million of advertising revenue for the quarter.
Retransmission consent fees increased $46 million in the first quarter, with Local TV station contributing $24 million to that total. The fees, paid by cable operators to carry television programming on their systems, are a growing source of revenue for Tribune Co. and other station owners.
Broadcasting operating expenses were up 74 percent, or $142 million, in the first quarter. That increase includes $47 million in direct pay and benefits for the Local TV stations, and a $22 million increase in programming expenses.
Promotion expense was up $8 million, including $2 million in advertising to support the debut of "Salem," the first of several original television series rolling out on national cable channel WGN America.
Broadcasting operating profit was up 37 percent, or $17 million, with the Local TV stations accounting for $16 million of that total.
Tribune Co. corporate expenses were $28 million for the quarter, up $18 million year over year. Professional fees related to the upcoming spinoff of Tribune Publishing and recent acquisitions, such as Local TV, accounted for about half of that increase, with the balance tied to higher compensation expense.
Overall, the company reduced staffing levels by 65 employees in the first quarter, down from 70 in the first quarter of 2013.
Follow @robertchannick Follow @chibreakingbiz
(c)2014 Chicago Tribune
Visit the Chicago Tribune at www.chicagotribune.com
Distributed by MCT Information Services