Sale of Assets Helps Push Times Mirror Net Up 114%
Times Mirror Co. reported Thursday that its earnings in the second quarter rose 114% over the year before to $191.7 million but said the gain was due in large part to the sale of several subsidiaries and a change in accounting procedures.
Without the sale of assets and the accounting gain, Times Mirror said, earnings would have been more modest. On a strictly operating basis, second-quarter earnings after taxes would have been $51.1 million, 14% lower than last year, in part because of the loss of income from the divested subsidiaries. Times Mirror said, however, that operating profits are ahead of last year among those operations that the company retains.
Revenue rose less than 1% from the year before to $748.9 million.
Among its various media holdings, Los Angeles-based Times Mirror owns eight newspapers, including the Los Angeles Times, Newsday, the Hartford Courant and the Denver Post. Earlier this year it announced plans to acquire the Baltimore Sun and to sell the Dallas Times Herald.
“Operating profits from the company’s continuing lines of business were slightly improved,” said Robert F. Erburu, Times Mirror chairman, president and chief executive. However, “economic conditions remain weak in several of our markets. These factors continue to influence our perspective, and we remain cautious in our outlook for the second half.”
Times Mirror’s second-quarter earnings rose overall because of $133.8 million that the company gained after taxes from the sale of its microwave communications company, of television stations in Syracuse, N.Y., Elmira, N.Y., and Harrisburg, Pa., and of its 50% interest in a Las Vegas cable television system.
Second-quarter earnings also reflected roughly $6.8 million gained after taxes after the company applied new accounting procedures specified by the so-called Statement of Accounting Standards No. 87. The new procedures are designed to more accurately count the cost of operating corporate pension funds, and all companies are required by federal regulators to institute them by the end of 1987.
Times Mirror said the new accounting methods allowed it to show higher profits than the previous methods because high returns on pension fund investments and overestimates of payroll costs have left the pension plan over-funded.
Times Mirror said its newspaper division showed higher operating profit in the second quarter over the year before, principally because of strong quarters at The Times and the Hartford Courant. The Dallas Times Herald, the sale of which is expected to become final in the third quarter, posted a loss in the quarter due to “the weak Texas economy,” the company said.
The Denver Post, which also has suffered because of the effect of lower oil prices on the economy of its market area, reported “flat” results during the quarter.
The company said operating profits improved over last year in its other divisions as well, including books, magazines, broadcast television and cable television.
