Times Mirror Posts 74% Increase in First-Quarter Net Income

Citing strong performance by its newspapers, Times Mirror Co. on Wednesday reported a 74% increase in net income for the first quarter.

Times Mirror Chairman, Chief Executive Officer and President Mark H. Willes said lower newsprint prices contributed to the better-than-expected results for the Los Angeles-based news and information company, which publishes the Los Angeles Times.

Net income for the three months ended March 31 jumped to $45.2 million from $26 million in the same period last year.

Per-share net income was 36 cents, up 157% from the 14 cents per share posted in the first quarter of 1996. The average estimate of nine analysts surveyed by IBES International Inc. was 31 cents per share for the quarter. In the quarter, Times Mirror, which has been repurchasing its stock, had 96.2 million weighted average common shares and common share equivalents, down 8.6% from the year-ago quarter.

Revenue declined to $773.9 million from $806.8 million, primarily because of divestitures.

Times Mirror is reaping the rewards not only of continued cost cutting, but also of economic strength in Los Angeles and the company’s other markets and strong advertising and circulation gains at its newspapers, Willes said.

“We are showing signs of real growth in our basic business,” Willes said in an interview. “We’re not about cost cutting, even though we’ve had to do that to get fiscally fit. We’re about growth.”

“What really generates long-term growth is the quality of the product,” he said.

However, Willes cautioned that year-to-year comparisons of quarterly net income are not expected to be as strong for the rest of 1997, partly because of anticipated increases in newsprint prices.

Times Mirror’s stock rose 50 cents per share to close at $55 on the New York Stock Exchange.

Wall Street is beginning to expect better-than-expected earnings by newspaper publishers, after years of disappointing profits and circulation figures, said Steve Barlow of Credit Suisse First Boston in New York.

“Overall, everyone is fairly pleased with the [Times Mirror] results,” Barlow said. “It’s really the newspaper side that is carrying the day.”

Times Mirror’s newspapers posted operating profit of $92.5 million, up 81.3%, on revenue of $514.7 million, up 4%. In addition, the company’s two largest newspapers, The Times and Newsday, posted daily circulation gains.

Daily circulation at the Los Angeles Times rose to 1,068,812, up 4.7%, in the six months ended March 31, according to figures filed with the Audit Bureau of Circulations. It was the second consecutive six-month gain for The Times, which had gone five years without a weekday circulation increase.

Sunday circulation slipped 2.1% to 1,361,988, reflecting an increase in home delivery prices as well as a general trend toward declining Sunday circulation at newspapers nationwide, the company said.

In addition to The Times and Newsday, Times Mirror publishes the Baltimore Sun, the Hartford Courant and other papers. It also publishes national consumer and trade magazines as well as professional information for the legal, health sciences, aviation and training industries.