Tribune profit falls less than expected

Tribune Co. on Wednesday reported third-quarter profit that fell less than analysts estimated, easing investor concern that Sam Zell will have trouble financing an $8.2-billion buyout of the media company that publishes the Los Angeles Times.

Tribune shares rose after the company said profit excluding some items was 38 cents a share, beating the 26-cent average of analysts’ estimates compiled by Bloomberg. Games played by the Chicago Cubs, the baseball team owned by Tribune, and higher ratings for the CW network boosted TV advertising, while national print ads helped mitigate a drop in classifieds.

“This is very important considering that there’s been uncertainty in the market regarding whether the transaction will close,” said Mike Simonton, a bond analyst at Fitch Ratings in Chicago. “Any progress forward could be a good sign.”

Net income declined 7% to $152.8 million from $164.3 million a year earlier, Chicago-based Tribune said. On a per-share basis, earnings almost doubled to $1.22 after the company bought back stock in May as part of its plan to go private. Sales fell 4.1% to $1.28 billion.

Real estate billionaire Zell, who is leading the $34-a-share buyout, has said he plans to sell the Chicago Cubs and hold on to Tribune’s 11 metropolitan newspapers and 23 television stations.

Tribune said Wednesday that it still expected to complete the transaction in the fourth quarter.

Tribune shares gained 63 cents to $28.18. They are 17% below the price offered by Zell.

Newspaper advertising sales fell 9% to $674.5 million in the third quarter. Sales of classifieds dropped 18%, with real estate ads plummeting 26% because of a housing slump in markets including Florida and California. Television revenue rose 3.9% to $288.3 million.

To complete the deal, Tribune still needs a waiver of U.S. government regulations that bar companies from owning a newspaper and television station in the same market. Tribune owns The Times and KTLA-TV Channel 5 in Los Angeles, and its existing permissions would expire if the company is sold.