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NEW YORK (AFX) - Newspaper publishers delivered more discouraging news Thursday as Tribune Co. and The New York Times Co. both reported sluggish advertising revenue in the third quarter.
Tribune said it was still on track to decide on a restructuring strategy by the end of the year. The Times, meanwhile, downplayed speculation that it was considering a leveraged buyout.
The Times, which also owns The Boston Globe and other newspapers, reported a 4.2 percent slump in advertising, while Tribune's newspaper advertising fell 2 percent. The Times was especially hard-hit by continued weakness in its New England properties, anchored by the Globe, where advertising slumped 10 percent.
The New England market has been especially hard hit by the consolidation of big retail advertisers such as Filene's, while classified advertising fell on weakness in autos, help wanted and real estate.
Tribune, which owns the Los Angeles Times, Newsday and the Chicago Tribune, among other papers, reported a big jump in net earnings to $162.2 million, or 65 cents per share, compared with $21.9 million, or 7 cents per share, due to one-time gains as it unwound two complex partnerships with its largest shareholder.
Excluding the gain, Tribune earned 43 cents per share, short of the 45 cents that analysts had been expecting, according to Thomson Financial. Revenues fell almost 3 percent to $1.35 billion.
Tribune, under pressure from its largest shareholder, has been considering ways to restructure the company, and a special committee of its board is expected to make recommendations by the end of the year.
On Wednesday Tribune said the committee had retained Morgan Stanley as its financial adviser as it considers alternatives, which could include a possible sale or breakup of the company.
Analysts remained generally downbeat about the industry, saying they saw little in today's reports to give them hope for a turnaround. Merrill Lynch analyst Lauren Rich Fine told investors in a note regarding the Times that "industry and company fundamentals remain lackluster with no real sense that revenue declines have bottomed."
JPMorgan Chase analyst Frederick Searby said in a note that his team remains "concerned about print ad revenue across the industry given anemic print national ad spending and decelerating classified ad revenue growth."
The Times' results beat recently lowered expectations, but still reflected considerable weakness in print advertising. The company reported earnings of $14 million, or 10 cents a share, down from $23.1 million, or 16 cents a share.
The results included charges of 3 cents per share for job cuts and another 3 cents per share related to the sale of the company's 50 percent stake in Discovery Times Channel. The year-ago period also included a charge of 5 cents per share related to job cuts.
Analysts polled by Thomson Financial had been expecting 12 cents per share, excluding the charges, but the Times' shares still fell 50 cents or 2.2 percent to $22.75 on the New York Stock Exchange. Tribune's shares were off 12 cents at $32.78.
Speaking on a conference call with analysts, Times CEO Janet Robinson downplayed speculation of a potential leveraged buyout of the company. Only the Times' controlling shareholders, the Ochs-Sulzberger family, are able to change the structure of the company, and "they have given no indication that they plan to do so," she said.
Another publisher, Belo Corp., reported a 13 percent decline in profits on charges but the results still beat Wall Street expectations. Belo, which owns The Dallas Morning News, earned $19.2 million, or 19 cents per share, down from $22.1 million, or 20 cents per share, during the same period last year. Belo's television revenues rose 6.9 percent, but newspaper revenues fell 4.2 percent.
Analysts polled by Thomson Financial were looking for third-quarter earnings of 18 cents per share. The company's shares rose 25 cents or 1.5 percent to $17 on the NYSE.
AP Business Writer Ashley M. Heher contributed to this story from Chicago. Copyright 2006 Associated Press. All rights reserved. This material may not be
Copyright 2006 AFX News Limited. All Rights Reserved.
