Tribune was the second newspaper company to beat Wall Street estimates in recent days. Yesterday, the New York Times Co. posted a 2% revenue increase and a slight decline in ad revenue, prompting one analyst to declare the company "blew the top off."
Lest anyone try to divine an industry upswing from the two overperformers, fellow publishers Gannett Co. and McClatchy last week posted third-quarter results more in line with expectations that the newspaper industry's long decline will continue.
Tribune cited improvements in national advertising and interactive advertising at its newspapers, as well as more income from its investment portfolio within an otherwise challenging quarter. Newspaper circulation revenue dropped 5% and ad revenue dropped by 9%, led by an 18% decline in classified ads. Tribune's broadcasting and entertainment group performed better, posting a 3% revenue gain.
Tribune sale still on
But those results still managed to exceed expectations, and investors were further heartened by an assurance from Tribune CEO Dennis FitzSimons that the company's $8 billion, $34-per-share going-private transaction -- which has been viewed with increasing suspicion given the current borrowing environment -- is still on track for the fourth quarter.
"It has more to do with the deal looking likely, rather than the fundamentals," said Barrington Research analyst James Goss. "That said, the earnings were still better than the consensus."
Preliminary results released by McClatchy showed a 10% decline in ad sales and a 4% decline in circulation. Shares -- already down more than 60% this year -- fell another 3.7% today.
And Gannett last week reported a 5.6% decline in ad revenue, thanks in part to a 6.6% decline at flagship USA Today, which did not seem to benefit from the national-ad pickup noted by Tribune and the Times Co.