Tribune net income surges

Published in I-Street

January 30, 2003

By Jeff Meredith

CHICAGO - Reeling no more, Chicago-based Tribune Co. delivered impressive fourth-quarter earnings Wednesday. The media giant reported net income of $193.5 million, or 57 cents a share, compared with $106.8 million or 32 cents a share during the 4th quarter of 2001. The 81 percent increase was driven by an uptick in ad revenues.

For the year, Tribune's net income rose to $443 million, or $1.30 a share, from $111.1 million or 28 cents a share in 2001.

"This was an outstanding year for our company," said John Madigan, Tribune's chairman. "Our people have proven once again that they are star performers. Through their efforts, we achieved record earnings per share for the fourth quarter and full year, and our businesses established real momentum heading into 2003."

The clouds of war could curb such enthusiasm. Dennis Fitzsimmons, Tribune's president and CEO, acknowledged the impacts on the company's publishing business. Looking at the first quarter, Fitzsimmons said classified ads are down slightly, "which is what we expected. We also think the uncertainty of a war with Iraq is impacting job creation and help wanted."

In the company's three largest markets - Chicago, New York and LA - quarterly ad revenue increased 11, 10 and 5 percent respectively. Tribune's television group produced a 22 percent increase in revenue as its 24 stations benefited from improved market conditions and a strong fall from the WB Network.

Tribune Co. is not the only newspaper publisher riding high this week; McClatchy Co. posted record earnings Thursday of $39 million in the fourth quarter. Net income was 86 cents per share, a boost over last year's fourth quarter earnings of 66 cents per share.

For Tribune, the Interactive division could be one to watch in 2003. While the company said Tribune Interactive has reached profitability and pointed to CareerBuilder increasing "its market share by about 2 points at the expense of Monster," the unit was breakeven in the 4th quarter after being cash flow positive in the the 3rd quarter.

"The declined reflected significantly higher promotional spending for CareerBuilder and Cars.com in order to build brands, build traffic and increase market share over time. Looking ahead, we expect to again be cash flow positive and show continued improvement over 2002," said Don Grenesko, senior vice president and CFO for Tribune.

Fitzsimmons said CareerBuilder's January traffic "is up 50 percent plus from the 4th quarter." CareerBuilder has also gotten a boost from its appearance in Gannett markets. In late 2002, Gannett, the nation's largest newspaper publisher, took a one third stake in CareerBuilder alongside Knight-Ridder and Tribune.