Times Mirror Co. Net Income Off 13% in 3rd Quarter

Times Mirror Co. reported Tuesday that it earned $70.1 million in the third quarter, off 13% from the previous year, when the sale of timberlands boosted earnings.

Excluding those gains from asset sales, the 1989 earnings were 13% higher for the Los Angeles-based media company, which publishes The Times, Newsday, the Baltimore Sun and other newspapers. Revenue increased 7% in the quarter to $873.9 million from $814.8 million.

“Overall, it was better than expected,” said Drew Marcus, vice president of Kidder, Peabody & Co. in New York. “But we do have some concern about high cost growth and an uncertain revenue environment.”

Marcus said costs in the newspaper division increased 5.5%, outpacing revenue growth of 4%. That was the fastest growth in costs among the 10 newspapers that Marcus monitors, and he noted specifically the expense of new zoned editions at Newsday and the Hartford Courant as well as higher promotional costs for the Orange County edition of The Times.

Net income for the first three quarters of 1989 was $223.9 million, a slight decrease from $235.1 million in 1988. Excluding gains from asset sales in both years, the 1989 year-to-date earnings exceeded those in 1988 by 7%. Revenue totaled $2.58 billion, up 7% from $2.41 billion in the first three quarters of 1988.

A robust performance in cable television and professional publishing companies, along with improvement in broadcast operations, helped offset a decline in the newspaper group, primarily in the Northeast, the company said.

Overall, the newspaper division reported a 5.7% decline in year-to-year operating profits for the quarter. In a statement, Robert F. Erburu, Times Mirror chairman and chief executive, said softness in advertising volume, primarily in the Northeast, continued to adversely affect the newspaper division’s performance.

The cable television division reported a 69.7% increase in operating profit to $17.4 million. The company said controls on expenses and growth in the number of subscribers had boosted profits.

The division responsible for book, magazine and other publishing reported that operating profit climbed 32.4% to $49.5 million. Improvements in the Texas economy helped increase earnings in the broadcast division, which includes television stations in Dallas and Austin, by 12.5%, to $7.8 million.

“It’s good to have the newspaper weakness offset by other divisions, but I think what investors want to see is a rebound in the newspaper division, and I see no signs of that yet,” said Bruce E. Thorp, an analyst with Provident National Bank in Philadelphia.