A continued weak advertising environment resulted in an 8% decline in first-quarter operating revenue and a 16% drop in operating cash flow for Tribune Co., parent of the Los Angeles Times, KTLA-TV Channel 5, the Chicago Tribune and other media holdings.
However, because of Tribune's conversion to a tax-advantaged, employee-owned company in December, it posted a one-time, $1.86-billion income tax adjustment that resulted in net income of $1.82 billion for the quarter that ended March 31, compared with $11 million in the same 2007 period.
Quarterly operating revenue was $1.11 billion, compared with $1.21 billion a year earlier, and operating cash flow was $200 million, down from $239 million.
"Print ad revenues continue to be challenged by the weak economy's impact on real estate and classified advertising," Tribune Chairman and Chief Executive Sam Zell said in a statement accompanying Thursday's earnings report. "Broadcasting operating results are notably more stable."
In the publishing division, which includes Tribune's nine newspapers, operating revenue fell 11% to $823 million, from $936 million in the first quarter of 2007.
Advertising revenue was down 15%, with the sharpest drop -- 27% -- coming in the classified segment, where real estate ad sales fell by 41%. Operating cash flow in publishing plunged 56%, to $80 million from $184 million. The drop resulted partly from a $37-million charge for severance and special termination benefits arising from an employee buyout this year.
The broadcasting and entertainment division's operating revenue rose 3%, to $292 million, helped by higher national TV ad sales. An $83-million gain on the sale of KTLA's studio production lot helped double operating cash flow to $148 million. The division includes Tribune's 23 TV stations, the WGN cable TV superstation, Chicago's WGN radio and the Chicago Cubs baseball team.
Analysts have forecast a decent year for national TV advertising because of presidential campaign spending.