Tribune Media earnings rose 25% in the second quarter, according to financial statements released Tuesday morning.
The Chicago-based media company reported net income of $82.9 million, up from $66.3 million a year earlier. Revenue increased 23% to $894.5 million.
It was the last quarter the company formerly known as Tribune Co. housed its broadcasting and publishing assets under one roof. The company's legacy newspaper holdings were spun off last week into Tribune Publishing, a stand-alone, publicly traded company.
Broadcasting revenue was up 63% to $425.8 million, due primarily to the $2.73 billion acquisition made last December of 19 television stations from Local TV. On a pro forma basis, the broadcast revenue increase was $19.8 million, or 4.9%, with ad revenue down fractionally.
Meanwhile, publishing revenue for the quarter was essentially flat at $468.7 million, with a $19 million decline in advertising revenue offset by revenue from the February acquisition of metadata company Gracenote, which became part of Tribune Media post-spinoff.
Net income for Tribune Media was down 1% to $124 million for the first six months of 2013, according to the results.
"I am very pleased with our accomplishments in the second quarter," Peter Liguori, Tribune Media president and chief executive, said in a statement. "While the core advertising market experienced headwinds in the first half of the year, we continue to be encouraged by the strength of our new broadcast scale, as evidenced in our year-over-year retransmission fee increases, and feel positive about the opportunities presented by the political advertising landscape in the second half of 2014."
Investors seem less pleased with the results, with the stocks of both Tribune Publishing and Tribune Media trading down after the news Tuesday.
Tribune Publishing, which trades on the New York Stock Exchange under the symbol TPUB, was down more than 6% to $19.45 at midday, dropping its equity value below $500 million. Privately held Tribune Media, which trades over-the-counter as TRBAA, was down more than 4% to $75.75 per share, giving it a market cap of about $7.3 billion.
The Aug. 4 tax-free spinoff distributed just over 25 million shares of Tribune Publishing common stock to Tribune Media stakeholders. Tribune Media continues to hold 1.5% of the outstanding shares of Tribune Publishing stock.
Tribune Media, the renamed parent company, includes 42 owned or operated local television stations, national cable channel WGN America, WGN Radio and other broadcasting assets, as well as real estate holdings and equity investments.
Broadcasting ad revenues increased 57%, or $230 million, to $633.5 million during the first six months, due to the acquisition of the Local TV station group. Ad revenue actually declined by $3.8 million, if the Local TV stations are included in last year's totals.
Retransmission consent fees paid by cable and satellite providers to carry Tribune Media's TV stations increased $91 million to $112.7 million in the six months, due to higher rates and the addition of the Local TV group.
Net income on equity investments was $157 million in the six months, up from $53 million in during the same period in 2013. Most of the increase is due to the Classified Ventures sale in April of its Apartments.com business to Costar Group for $585 million. Tribune Media, which owns 27.8% of Chicago-based Classified Ventures, received $160 million from the transaction before taxes.
Last week, Tribune Media announced an agreement to sell its stake in Classified Ventures, which still owns Cars.com, to Gannett Co. for $686 million. The transaction is expected to close before the end of 2014.
The spun off Tribune Publishing is also headquartered in Chicago and includes the Chicago Tribune, Los Angeles Times and eight other daily newspapers.
The newspapers continued to operate in the black during the first six months, but declining ad revenues took a bite out of operating profit, which decreased by 32%, or $34 million, to $71.6 million.
Publishing revenues declined 1%, or $13 million, to $922.5 million during the first six months of 2014. Ad revenue fell 7%, or $38 million, to $477.4 million. A large chunk of that decline came from preprint revenues, which were down $14 million in Chicago and Los Angeles. Digital advertising revenues grew 1%, or $1 million.
Six-month circulation revenues were up 1%, or $3 million, due to higher sales of digital editions and increases in home delivery rates. The largest circulation revenue increase was in Chicago.
The publishing revenue declines were offset by a $16 million decrease in direct pay and benefits from continued staffing reductions at the newspaper during the six months, a trend that is likely to continue for Tribune Publishing as a stand-alone company, according to executives.