Times Mirror Profit Up 77% in 4th Quarter, 25% for ’88

Reflecting strong profit gains in its cable television and professional publishing businesses, Times Mirror Co. reported that its earnings rose 77% in the fourth quarter, compared to a year ago when the company’s profits were depressed by losses from asset sales.

Net income for the latest period rose to $96.8 million from $54.7 million in the year-ago quarter, which included a $43.7-million loss on the sale of assets. Fourth-quarter revenue rose 6.9% to $925.1 million.

The company, which publishes the Los Angeles Times, Newsday and the Baltimore Sun among other newspapers, said quarterly results were aided by improvements in most categories of advertising--including strong demand in the holiday period--and successful efforts to cut costs.

For all of 1988, the Los Angeles-based company reported a 25% rise in net income on a 6.1% increase in revenue. Net income, including a $58.9-million gain on the sale of assets, totaled $331.9 million, compared to $266.5 million in 1987. The year-ago net included a $29.2-million loss on the sale of assets. Revenue for the year rose to a record $3.33 billion from $3.14 billion in 1987.

While overall profits improved for both the fourth quarter and full year, results for the company’s broadcast television and newspaper publishing operations continued to be sluggish. “Although we saw gains in advertising across the board, newspaper publishing’s lower operating profit in the fourth quarter--and for the full year--was in part the result of softness in certain categories of advertising throughout most of 1988,” Robert F. Erburu, Times Mirror chairman and chief executive, said in a statement. Newspaper publishing operating profit declined 14.7% in the quarter.

Several newspaper publishing concerns were plagued in 1988 by soft advertising, in part because of a wave of mergers in the retail industry and high newsprint prices. Some analysts said they expect newspaper advertising to be soft for the first three to four months of 1989, with some improvement in retail advertising later in the year.

“I don’t think retail could get much worse,” said Rodd J. Macklin, an analyst with Legg Mason Wood Walker in Baltimore, citing the serious impact of industry consolidation in 1988. “I think there will be some improvement in major cities,” he said.

Michael A. Kupinski, an analyst with A. G. Edwards & Sons in St. Louis, was less optimistic, saying he was “not really looking for improvement (in advertising) in 1989.” But he expects less pressure on newspaper profits from high newsprint cost and other expenses.

Times Mirror said a depressed Texas economy hurt its broadcast television stations in Dallas and Austin, despite a fourth-quarter surge in spot advertising at the Dallas station. Broadcast television operating profit declined 24.8%, the company said, while cable television operating profit rose 68.2% in the quarter.

Fourth-quarter operating profit--before a gain on the sale of assets, interest expenses and taxes--rose 7.6% to $171.2 million from $159.1 million a year ago, Times Mirror said. Also included in operating profit in the 1988 quarter was the recognition of $12.2 million in income from the settlement of obligations of several pension plans, which mostly offset an $11.5-million writedown of certain press equipment at the Los Angeles Times.