Tribune earnings fall 59%; shares up
Tribune Co. said second-quarter profit fell 59% because of a drop in ad sales. The shares surged the most in 10 months after the company said it was moving ahead with plans to be taken private by billionaire Sam Zell.
Net income dropped to $36.3 million, or 18 cents a share, from $87.8 million, or 28 cents, a year earlier, Chicago-based Tribune said. Revenue fell 6.8% to $1.31 billion in the period ended July 1.
Chief Executive Dennis J. FitzSimons said Tribune planned to complete the transaction with Zell in the fourth quarter and expected to be in full compliance with credit agreements. That helped allay investor concern after Los Angeles Times Publisher David D. Hiller said July 13 that Tribune’s largest newspaper had one of its “worst quarters.”
“They said they’re going to try to get it done, which is all that really counts,” said Edward Atorino, an analyst at Benchmark Co. in New York. “Revenue was pretty bad, about what I thought, but not worse.”
Tribune shares gained $1.03, or 3.8%, to $28.20. The stock is 17% below the $34 a share the company is offering for its stock in Zell’s deal.