Tribune 1Q Profit Slides (DINOSAUR MEDIA EXTINCTION ALERT)

CHICAGO (AP) -- Newspaper publisher Tribune Co. said Thursday that its first-quarter profit fell 29 percent as revenue edged lower.

Net income after paying preferred dividends declined to $100.7 million, or 33 cents per share, from $140.8 million, or 44 cents per share, a year ago. The company said results included severance charges and a non-operating loss totaling 6 cents per share, stock based compensation expenses of 4 cents per share, and a 1 cent per share gain from a property sale. Revenue edged down 1 percent to $1.3 billion from $1.32 billion last year, with newspaper ad revenue remaining flat. "Strength in classified, with interactive revenues up nearly 30 percent, was offset by declines in national and retail advertising," Tribune said.

Analysts surveyed by Thomson Financial expected earnings per share of 36 cents, including stock options expenses, on revenue of $1.3 billion.

The company, which began trimming jobs last year as part of a cost cutting inititative, said that tight cost controls remain in effect. The company has cut some 1,200 positions.

Bloomberg's story

Tribune Profit Falls 28% on Job Cuts, Stock Options (Update1)

April 13 (Bloomberg) -- Tribune Co., publisher of the Los Angeles Times and Chicago Tribune newspapers, said its first- quarter profit fell 28 percent on stock-options expenses and costs to cut jobs.

Net income dropped to $102.8 million, or 33 cents a share, from $142.8 million, or 44 cents, a year earlier, the Chicago- based company said in a PRNewswire statement today. Sales slipped 1.3 percent to $1.3 billion.

Tribune, the second-largest U.S. newspaper publisher, cut jobs during the quarter and closed units including Distinction magazine and a printing plant to trim costs as the industry suffers from the defection of advertisers to the Internet. Circulation revenue fell 4 percent and newspaper ad revenue was ``flat,'' the company said.

``We remain concerned about the 2006 ad rates,'' said JP Morgan analyst Frederick Searby in a report before the announcement. ``Given Tribune's heavy exposure to challenging metro markets we believe revenue growth will be muted in 2006.''

Tribune shares, down 7.4 percent this year before today, fell 5 cents to $28.02 in New York Stock Exchange composite trading yesterday.

The earnings missed analysts' estimates. Credit Suisse analyst Debra Schwartz, who rates the stock ``neutral,'' expected earnings of 35 cents a share, including stock-options expenses. The consensus was for profit of 36 cents a share on sales of $1.3 billion, according to the average estimate of 12 analysts surveyed by Thomson Financial. Thomson declined to say what is excluded from its calculations.

Job Cuts

The company recorded a charge of 4 cents a share to cut jobs and start new contracts with its Newsday workers. Stock- options expenses lowered earnings by 4 cents a share.

Tribune follows Gannett Co., the largest U.S. newspaper publisher, in reporting declining profit. Gannett yesterday said its first-quarter profit fell 11 percent on stock-options expenses and higher newsprint costs. The McLean, Virginia-based company also said ad sales at USA Today, the largest U.S. newspaper by circulation, declined 4.2 percent.

Newspaper publishers will report an average 8 percent decline in per-share earnings because of slower revenue growth and higher costs including stock-option expenses, Merrill Lynch & Co. analyst Lauren Rich Fine said in an April 11 note.

New York Times Co., the No. 3 U.S. newspaper publisher, and McClatchy Co. also report results today. McClatchy last month agreed to buy Knight Ridder Inc. for $4.5 billion.

(Tribune will hold a conference call at 9 a.m. New York time to discuss the results. To listen dial 800-901-5218 and quote passcode 11607847.)

Marketwatch.com's version of the news...

Tribune Co. profit slips
Weakness in circulation, retail and auto advertising

By David B. Wilkerson, MarketWatch
Last Update: 7:57 AM ET Apr 13, 2006

CHICAGO (MarketWatch) -- Tribune Co. on Thursday posted a 28% drop in its first-quarter profit, hurt by weakness advertising and its broadcasting division.
Tribune (TRB) said net income slipped to 102.8 million, or 33 cents a share, from $142.8 million, or 44 cents a share.

Operating revenue fell about 1% to $1.3 billion.

Analysts expected Tribune to post a first-quarter profit of 36 cents a share on revenue of $1.3 billion.

Newspaper advertising revenue was flat for the quarter, as strength in classified advertising was offset by a decline in national and retail advertising.

Publishing's first quarter operating revenues were $997 million, down 1%, as cash operating expenses rose 2%, and included a $19 million associated with the new union contracts at Newsday.

"Tight cost controls remain in effect, and our actions in 2005 resulted in a 5% year-over-year staff reduction, or approximately 1,200 positions across the company, and lower compensation expense," Dennis FitzSimons, Tribune chairman, president and chief executive officer said in a statement.

"Looking ahead, our new labor agreements at Newsday will result in significant expense savings, while in TV we expect our affiliation with the CW Network to have a positive impact on revenues later this year," he said.

Broadcasting and entertainment revenue fell 2% to $303 million. First-quarter television revenue fell 2%.
In the 2006 first quarter, Tribune recorded a pretax non-operating loss of $14 million.

In the 2005 first quarter, Tribune recorded a pretax non-operating loss of $4 million. In addition, the company recorded favorable income tax settlement adjustments of $12 million as a reduction in income tax expense.

In the aggregate, non-operating items in the first quarter of 2005 resulted in an after-tax gain of $9 million, or 3 cents a share.

Tribune shares fell 5 cents to close at $28.02 on Wednesday

Tribune Profit Drops 28%
As Ad Weakness Persists
A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
April 13, 2006 8:58 a.m.

Tribune Co. reported its profit dropped 28% in the first quarter as weakness in newspaper-advertising revenue persisted and the publisher logged charges for an accounting change and costs related to new union contracts at Newsday.

The company, which also publishes the Los Angeles Times and Chicago Tribune, said net income fell to $102.8 million, or 33 cents a share, from $142.8 million, or 44 cents a share, a year earlier.

The most recent quarter's results included a charge of four cents a share for stock-based compensation as a result of new accounting rules, a charge of four cents a share for severance and other payments related to new union contracts at Newsday and a gain of one cents a share for publishing-property sales.

Revenue fell 1.3% to $1.3 billion from $1.32 billion. Newspaper-advertising revenue was flat for the quarter, as strength in classified advertising was offset by a decline in national and retail advertising. Revenue at the publishing unit slipped 1% to $997 million as cash operating expenses rose 2%.

"Looking ahead, our new labor agreements at Newsday will result in significant expense savings, while in TV we expect our affiliation with the CW Network to have a positive impact on revenues later this year," Dennis FitzSimons, Tribune's chairman, chief executive and president, said in a statement.

The company said tight cost controls remain in effect, adding it had reduced staffing levels by 5%, or 1,200 positions, in 2005.

Broadcasting and entertainment revenue fell 2% to $303 million.

Like other newspaper companies, Tribune is struggling with weakness in print advertising as consumers increasingly look to the Internet as a source of information, drawing advertisers away from traditional media. The shift has been particularly noticeable in the decline in highly profitable automobile and job classified ads.

On Wednesday, Gannett Co., which publishes USA Today and other newspapers, reported an 11% drop in its first-quarter profit for similar reasons: expensing of stock options and weak ad revenue. (See related article.)

Due out later Thursday are results from New York Times Co. and McClatchy Co.

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