Times Mirror Posts 10% Gain in Quarterly Profit

Times Mirror Co. said Thursday that extensive cost-cutting efforts lifted its fourth-quarter profit from continuing operations--and after excluding charges related to the restructuring--by 10% from a year earlier despite little change in revenue.

The gain to $57.1 million, or 42 cents a share, from $51.7 million, or 40 cents, was paced by the company’s newspaper publishing group. The group, led by its flagship Los Angeles Times, also posted a 10% gain in operating income after the special charges were excluded, despite a sharp rise in newsprint costs.

Excluding all of the extraordinary gains and losses, Times Mirror’s profit from continuing operations for all of 1995 rose 15% to $139.6 million, or 84 cents a share, from $121.6 million, or 95 cents, in 1994.

(Although the overall earnings from continuing lines rose last year, the per-share results fell in large part because of new preferred-stock-dividend requirements at Times Mirror that reduced the amount of earnings applicable to its common shares.)

The charges related to Times Mirror’s restructuring program totaled $198 million after taxes in the quarter ended Dec. 31, which produced a $141.6-million net loss for the company in that period. A year earlier, Los Angeles-based Times Mirror earned $52.7 million, or 41 cents a share.

Fourth-quarter revenue inched up 1%, to $966.7 million from $956.4 million.

“Our fourth-quarter results show that we are on the right track as our lower cost base contributed to our improved operating results,” Times Mirror Chairman Mark H. Willes said in a statement.

For all of 1995, Times Mirror’s restructuring program produced after-tax charges of $554 million. But they were more than offset by a $1.63-billion after-tax gain from Times Mirror’s sale of its cable television business in early 1995.

The end result was 1995 net income of $1.23 billion, or $10.02 a share, compared with $173.1 million, or $1.35, in 1994. Times Mirror’s annual revenue rose 3%, to $3.45 billion from $3.36 billion.

Analysts said the results were slightly better than expected, a view that was shared by Wall Street. After the announcement, Times Mirror’s common stock rose $1.50 a share to close at $32.50 in New York Stock Exchange composite trading.

“It was a modest surprise,” said John Strehle, an analyst with Dean Witter Reynolds Inc. in New York. In particular, the newspaper group’s operating gains were “pretty significant” and “rose more than I thought they would,” he said.

The gains were also notable because the newspaper group’s combined advertising revenue in 1995 was virtually unchanged from the previous year at $1.56 billion, Strehle said.

Besides The Times, Times Mirror publishes Newsday in New York, the Baltimore Sun and other newspapers. It also publishes books, magazines, textbooks and other information and education products.

The company last year underwent a major cost-cutting program that included closing a New York City edition of Newsday, Baltimore’s Evening Sun and certain sections of The Times. About 3,000 jobs were eliminated, as was a consumer multimedia business, among other ventures.

The actions are expected to save the company about $135 million a year in operating costs.

Analysts cautioned, however, that Times Mirror--along with many other newspaper publishers--has yet to show that it can go beyond cost cutting and expand its franchise to produce significant revenue growth.