Times Mirror Profit Up 16%, Led by Newspapers

Times Mirror Co., which is being acquired by Tribune Co., said Thursday its first-quarter profit from continuing operations--and excluding one-time gains and charges--rose 16% from a year earlier, largely because of improvement at the Los Angeles Times and its other newspapers.

The earnings increase exceeded Wall Street analysts’ expectations, and was propelled by higher advertising revenues and lower newsprint costs, Times Mirror said.

But Times Mirror also cautioned that “the current outlook for the second quarter is more cautious.”

Chicago-based Tribune agreed last month to acquire Times Mirror for cash and stock valued at about $5.8 billion, and the deal is expected to be completed this summer. Besides The Times, Times Mirror owns the Baltimore Sun, the Hartford Courant and Newsday in suburban New York, among other papers.

“Times Mirror had an outstanding first quarter with strong performance at each of our companies,” Mark H. Willes, Times Mirror’s chairman, president and chief executive, said in a statement. “We’re pleased that we’ll be able to turn over to Tribune a company that is delivering very strong performance.”

In the quarter ended March 31, Times Mirror said, its income from continuing operations, and before the special items, rose to $57.9 million, or 90 cents per diluted share, from $50 million, or 60 cents a share, a year earlier. The special items included an $85-million pretax gain from the sale of the Sporting News.

Times Mirror was expected to earn 75 cents on that basis in the quarter, according to the average estimate of analysts surveyed by First Call/Thomson Financial, which tracks corporate profits.

Per-share earnings jumped 50%, much more than the overall profit, because Times Mirror had 15% fewer average shares outstanding in the latest quarter compared with a year earlier.

Including the discontinued lines and the one-time gains and charges, Times Mirror’s net income more than doubled, to $112.4 million from $48.8 million a year earlier. Its first-quarter revenue rose 7% to $745.3 million from $699.2 million.

Advertising revenue at The Times and the other papers rose 8.5% from a year earlier, “led by double-digit gains in both retail and national advertising revenue at the Los Angeles Times,” the company said. Daily circulation at The Times rose to 1.15 million, up 55,000 for the six months ended March 31 and up 5% from a year earlier, according to Audit Bureau of Circulation.

Meantime, its newsprint costs fell by 7%, both because of lower prices and reduced consumption by the papers, it added.

Times Mirror also publishes specialty magazines, such as Popular Science and Golf Magazine, and its Jeppesen unit provides flight-information services to the aviation industry.

Under the merger pact, Tribune agreed to buy up to 28 million Times Mirror shares for $95 a share in cash, and to swap 2.5 Tribune shares for the remaining stock in a tax-free exchange.

Tribune completed that cash tender offer this week, and the remaining Times Mirror stock is now trading above $95 a share on the open market because Tribune’s stock--which will be swapped for the remaining Times Mirror’s shares--has been rising as well.

Times Mirror closed Thursday at $98.94 a share, down 63 cents on the day, while Tribune slipped 6 cents to $40 a share, both in composite trading on the New York Stock Exchange.

At a Glance

Other earnings of California companies, excluding one-time gains or charges unless noted, include:

* PG&E; Corp., owner of California’s biggest utility, said first-quarter earnings climbed 74% to $284 million, or 79 cents, on higher profits at its utility, power plants and energy-trading business. PG&E; was expected to earn 61 cents a share, the average estimate of analysts surveyed by First Call/Thomson Financial. Revenue declined 2.3% to $5 billion.

* Edison International, parent of Southern California Edison, said its earnings dropped 23% in the first quarter, in part because of losses associated with changes in operating rules governing its British power plants.

Edison, which last month cut its earnings projections based on the expected British rule changes and warm weather, said its net income fell to $109.5 million, or 32 cents a share, from $143.2 million, or 41 cents a share, a year earlier. Revenue grew 29% to $2.7 billion. Analysts on average forecast that the Rosemead.-based company would earn 30 cents.

* Franklin Resources Inc. said fiscal second-quarter earnings rose 40% to $143.4 million, or 58 cents a share, 3 cents better than analysts forecast, as the mutual fund company increased assets under management. Last year’s results included a $12.3-million charge related to the company’s decision to eliminate about 560 jobs.

Total operating revenue rose 10.5% to $612.5 million. Assets under management stood at $233.4 billion at the end of March, up 8% from $216 billion a year ago, but down slightly from $235 billion at the end of December.

* Imperial Bancorp said net income increased 36% to $19.3 million, or 41 cents a share, on healthy growth in earnings assets and strong fee income. Net interest income grew 25% and non-interest income jumped 57%, the banking company said. “Our strategic diversification into a wide range of businesses has yielded superior results for our shareholders,” said Chief Executive George L. Graziadio.

Bloomberg News was used in compiling this report.