Times Mirror Net Slumps 33%; Soft Ad Markets Cited

Times Mirror Co. reported Tuesday that its first-quarter net income fell to $46 million, down 33% from the $68.8 million in earnings the company posted in the first three months of 1989.

Revenue for the Los Angeles-based media concern--which owns broadcast and cable properties as well as the Los Angeles Times, Newsday in New York and the Baltimore Sun papers, among others--increased 3% to $875.2 million.

Robert F. Erburu, chairman and chief executive of Times Mirror, said the company’s first-quarter results “were adversely affected by the weak performance of our advertising-supported business lines, which continued to operate under extremely difficult market and economic conditions.”

Despite the difficult conditions, many analysts continue to believe that Times Mirror has been spared the brunt of the advertising slump because the largest of its media properties--including The Times, the company’s four television stations and some of its cable systems--operate outside the northeast United States, where advertising has been weakest.

Yet analysts are divided over whether the advertising slump will remain confined.

“I don’t see the problem spreading throughout the country,” said Rodd J. Macklin, an analyst at Legg Mason Wood Walker Inc. in Baltimore. “The L.A. Times had a fairly decent period in terms of advertising in the first quarter.” Excluding part-run issues, he said, The Times was only down about 2%, compared to double-digit decreases for some of the company’s other papers.

In contrast, John P. Reddan, an analyst for the Moran & Associates Inc. investment firm in Greenwich, Conn., is more pessimistic: “I don’t see any signs of it (soft advertising) bottoming yet; I could see it getting worse.”

Times Mirror’s results were also affected by a surge in The Times’ daily and Sunday circulation, about half of which was attributable to the closure of the Los Angeles Herald Examiner last November. Although the 9.5% gain in The Times’ daily circulation and 5.6% improvement in Sunday circulation helped boost revenue for the paper, it also increased operating costs.

Times Mirror’s newspaper publishing group, its largest business segment, reported a 38.1% decline in operating profit and a 1.3% decline in revenue for the quarter.

Times Mirror’s professional book companies, which include Matthew Bender & Co., Richard D. Irwin and Mosby-Year Book Inc., made strong gains, offsetting an advertising slowdown among the company’s consumer magazines. As a result, the book, magazine and other publishing segments recorded a 21.7% increase in operating profit.

Cable television also posted increased revenue and operating profit for the quarter, primarily by attracting more cable subscribers.

Although broadcast television revenue rose slightly in the quarter, increased programming costs produced a 14.1% decline in operating profit, the company said.