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Tribune Co. reports profit in third quarter

Tribune Co., the parent of the Los Angeles Times, reported a nearly $50-million profit in the third quarter as cost cuts offset further erosion in newspaper advertising.

The media company reported net income of $49.8 million in the three months that ended Sept. 29, a reversal from a net loss of $30.6 million in the year-earlier period. Revenue slid 4.7% to $694.6 million, including a 4% drop in the publishing unit and a 6% decline in the broadcasting division.

The company aggressively cut costs, with operating expenses dropping $47 million, or 7%, to $626 million. The newspaper division slashed $61 million while costs rose in other parts of the company.

Tribune’s compensation costs dropped by $23 million, or 15%, primarily because of reduced pension expense and lower staffing levels. The company eliminated 240 positions during the quarter. All but 10 were in the publishing unit.

“While we are pleased with the progress we have made on key strategic initiatives in the third quarter, our financial results in the period did not meet our expectations,” said Peter Liguori, Tribune chief executive.

The ongoing decline of newspaper advertising showed no sign of abating.

Publishing ad revenue dropped 7% to $245 million. The biggest declines were in food and drug stores, specialty merchandise and general merchandise.

Retail advertising fell $10 million, or 7%, to $126 million. National ads slid $6 million, or 12%, to $47 million. Classified ads declined $2 million, or 2%, to $72 million.

Digital ad revenue fell 2%, or $1 million.

Circulation revenue rose $3 million, or 3%, to $106 million. The company attributed that to increased digital sales and rate increases at some papers.

Tribune plans to spin off its eight daily newspapers into a separate company by the middle of next year. That likely would boost the value of the company's television, radio and Internet properties.

In the broadcasting division, operating profit slid 39%, to $42 million. Expenses rose 5% to $206 million.

Revenue declined by $16 million, or 6%, to $248 million. The company attributed that to lower ad revenue and a decline in the amount of revenue the company received from programming partners.


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