TRIBUNE CO. REPORTS RECORD EARNINGS

24% Spike Attributed to Cost Controls and Improved Ad Revenue

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NEW YORK (AdAge.com) -- Tribune Co. reported record earnings in the fourth quarter, helped by cost-cutting and improved advertising trends.

The parent of the Chicago Tribune and Los Angeles Times posted an 8% increase in revenue to $1.43 billion, and a 24% increase in net income to $193.5 million over the year-ago period; factoring out accounting changes enacted in 2001, net income for the quarter would have risen 81.1%. For the year, revenue rose 2% to $5.4 billion and net income rose 43% to $443 million from $309 million in 2001; factoring out the accounting changes, net income for 2002 would have quadrupled from $111.1 million in 2001.

Dailies see improvement
Management attributed the

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results to tight cost controls and improvement in advertising during the fourth quarter, especially in December. Advertising revenue in the Tribune's publishing division rose 7% in the fourth quarter to $805.6 million, to end the year flat at $2.95 billion. Ad revenues at the Tribune rose 11% and the Times rose 5% in spite of a drag on retail advertising caused by the lockout of West Coast docks during a labor dispute in late 2002.

Meanwhile, Tribune's broadcasting group showed a 16% increase in revenue for the quarter and 7% for the year.

Tribune management reaffirmed its targets of 2003 revenue growth in the mid-single-digit percentages. President-CEO Dennis FitzSimons said the year is off to a good start, with January retail advertising up in the mid-single digits, national up in the mid-teens and classified advertising down slightly, but showing improvement. The threat of war in Iraq is affecting job creation and help-wanted advertising, he said.

War coverage
War fears are "certainly creating some uncertainty" in advertising, especially in newspapers, Mr. FitzSimons said. "Advertisers are concerned about wall-to-wall [news] coverage" on TV displacing advertising, he said, though that may lead to an increase in spot TV sales, he added, as marketers shift to local ads to make up for the lack of network inventory.

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