Tribune Publishing posted a third-quarter loss of $3.4 million, or 13 cents a share, on flat revenue and said the numbers could be revised downward to reflect an unfavorable jury award Wednesday night.
By the numbers: The $3.4 million loss compared with a loss of $200,000 in the year-ago period. Adjusted earnings came in at 12 cents per share, topping analyst estimates. Revenue for the quarter was $404.3 million, essentially flat with last year, with revenue from acquisitions offsetting continued declines in advertising.
The reported loss does not include a $7.13 million jury award Wednesday to a former Los Angeles Times sports columnist in an employment lawsuit over age discrimination. The after-tax charge associated with the verdict, which Tribune Publishing plans to appeal, could increase the net loss by an estimated $5 million or 20 cents per share, the company said.
The “why”: Advertising revenue, excluding the San Diego Union-Tribune acquisition, fell 9.6 percent year-over-year. Circulation revenue was up 11.6 percent to $120 million but was flat excluding acquisitions. Revenue from acquired properties, including San Diego and the Chicago Sun-Times suburban newspapers, brought in $49 million during the third quarter.
Other highlights: Digital revenue was up 6.6 percent to $52 million for the quarter. Digital-only subscribers were up 37 percent year-over-year to 81,000. About 11,000 new digital subscribers were added during the quarter.
The company will convert to a metered paywall approach in 2016’s first quarter, said Denise Warren, a former New York Times executive who was named president of digital for Tribune Publishing in May. A metered paywall system allows visitors to view a certain number of stories online each month before requiring a paid digital subscription.
“Our research shows that visitors are almost twice as likely to purchase via a metered pay approach versus the premium model deployed at most of our properties,” Warren said.
Operating expenses were $403 million, up $3 million from the same quarter last year. CEO Jack Griffin said the company has realized more than $70 million of adjusted expense savings year-to-date. Tribune Publishing offered buyouts to some 7,000 employees across the Chicago Tribune, Los Angeles Times and its other media holdings last month in a bid to cut costs. Griffin said initial results show that the program reached its internal targets and the estimated outcome and financial impact will be detailed in a regulatory filing next week.
Outlook: Tribune Publishing, which revised its financial guidance downward in September, reaffirmed its full-year revenue estimates of between $1.65 billion and $1.68 billion. The company owns daily newspapers including the Chicago Tribune, Los Angeles Times and the San Diego Union-Tribune, which it acquired in May for $85 million.
The company offered to provide a $3 million refundable deposit Wednesday to help fund Freedom Communications, owner of the Orange County Register, which filed for Chapter 11 bankruptcy protection Sunday. The move could create a potential bidding war with Rich Mirman, Freedom’s CEO and publisher, who is heading up an investment group also seeking to assume control.
Quote you on that: “Yesterday we signaled our intention to bid for the assets of Freedom Communications,” Griffin said. “Our goal is to have a meaningful seat at the table during the (bankruptcy) process.”
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