Times Mirror Profit Dips; Ad Slump in East Blamed

With its media properties in the East suffering from a soft advertising market, Times Mirror Co. announced Wednesday that its earnings slipped 10% last year to $298 million, despite posting record revenue of $3.52 billion, up 5.5%.

Excluding gains from the sale of timberland and other assets in 1988 and 1989, the Los Angeles-based company’s per-share earnings would have declined only 1% year to year. In the fourth quarter, profit fell 23% to $74.1 million on revenue of $935 million.

Times Mirror--which publishes The Times, Newsday in New York and the Baltimore Sun papers, among others--attributed the fourth-quarter earnings decline primarily to “softness in advertising demand in the company’s newspaper, television and magazine markets.” It also cited expenses including a $6-million promotional effort to attract readers of the Los Angeles Herald Examiner, which closed down in November.

Last year was one of “mixed results,” Robert F. Erburu, Times Mirror’s chairman and chief executive, said in a prepared statement. “Most of our Eastern newspapers, our consumer magazines and our broadcast television group experienced difficult operating conditions. Yet the Los Angeles Times, Times Mirror Cable Television and our professional publishing companies produced impressive results.”

Several media analysts reached Wednesday said Times Mirror was spared the brunt of the advertising slump because the largest of its media properties, including the flagship Los Angeles Times, its four television stations and Orange County cable systems, lie outside the northeast United States, where the advertising has been weakest.

“The advertising slump is not uniform around the nation,” said James C. Goss, media analyst at Duff & Phelps in Chicago. “It seemed that the Western states were strongest and the East had fairly weak” advertising results.

Times Mirror’s financial results, added Michael A. Kupinski, senior analyst with A. G. Edwards & Sons in St. Louis, “were in line with expectations. It was a difficult year industrywide. But they were helped because West Coast (advertising) is doing pretty well.”

The Los Angeles Times’ daily circulation grew by more than 75,000 in the fourth quarter, and the company attributed much of the gain to the closure of the Herald Examiner. For the full year, The Times, the Baltimore Sun papers and the Morning Call of Allentown, Pa., all reported improved financial results. Operating profits at Newsday, however, were down sharply for the year, while results at the Hartford Courant and the company’s southern Connecticut newspapers also declined.

Times Mirror’s professional book companies, which include Matthew Bender, Richard D. Irwin and Mosby-Year Book Inc., recorded strong performances, offsetting a decline in operating profits from Times Mirror’s consumer magazine companies.

Cable television also posted a substantial improvement in operating profit for the full year. However, the cable division had several unusual fourth-quarter expenses stemming from the settlement of a legal dispute over the Orange County cable franchise as well as from higher property taxes assessed on the Orange County cable system. The assessment is being contested.

The company’s flagship broadcast station, KDFW-TV in Dallas, reported increased operating profit for the year. The increase, however, did not offset declines at each of the company’s three other television stations.