November 1, 2017 Last Updated 5:18 pm

Publisher of LA Times and Chicago Tribune reports a profit in Q3 earnings report

Tronc said total revenue fell 6.6%, but lower costs drove a $2.1 million in net income versus a more than $10 million loss in the same quarter of 2016

The New York Times reported earnings before the markets opened today and impressed with a good third quarter report. Revenue was up 6.1 percent due to added reader and digital ad revenue, though print revenue slid a very serious 20 percent. For the quarter, the paper the president likes to all ‘the failing New York Times’ reported a profit. (See here for details on NYTCO’s Q3.)

tronc, formerly known as Tribune Publishing, formerly known as The Tribune Company, also reported a third quarter profit when it reported after the bell this afternoon.

The publisher of the Los Angeles Times and Chicago Tribune said total revenue fell 6.6 percent, with total ad revenue down 14 percent in the quarter. But cost cuts, plus a reported gain on equity investments meant that the company came in with net income of $2.1 million, compared to a net loss of $10.5 million in third quarter 2016.

“I am pleased with the strategic actions we took during the quarter to better align our company with industry trends,” said tronc CEO Justin Dearborn. “The acquisition of the New York Daily News provided us with another strategic platform for growing our digital business, expanding our reach and broadening our services for advertisers and marketers.”

Here is the earnings announcement from tronc:


CHICAGO, Ill. — November 01, 2017 — tronc, Inc. today announced financial results for the third quarter ended September 24, 2017.

Third Quarter 2017 Financial Summary and Highlights:

  • Acquired the New York Daily News, which expands tronc presence as a provider of award-winning content across ten major U.S. media markets
  • Digital only subscribers were 265,000 in third quarter 2017, up 95% year-over-year, before including any contribution from the New York Daily News
  • Total revenues of $353.1 million, down 6.6% compared to third quarter 2016
  • Total operating expenses decreased $30.6 million compared to third quarter 2016
  • Net income was $2.1 million, or $0.06 per share, compared to a net loss of $10.5 million, or $0.29 per share, in third quarter 2016
  • Adjusted EBITDA was $35.3 million, down 3.6% compared to the prior year quarter
  • Cash on the balance sheet was $185.2 million providing substantial liquidity for the Company to execute its strategy in 2017 and beyond

“I am pleased with the strategic actions we took during the quarter to better align our company with industry trends,” said tronc CEO Justin Dearborn. “The acquisition of the New York Daily News provided us with another strategic platform for growing our digital business, expanding our reach and broadening our services for advertisers and marketers.  We now serve 10 major U.S. markets, including each of the top three, hold 105 Pulitzers and have over 81 million unique monthly digital visitors.”

Dearborn added, “We also named Ross Levinsohn as CEO and Publisher of the Los Angeles Times Media Group, in addition to announcing Lewis D’Vorkin as Editor-in-Chief and Mickie Rosen as President. Each of them brings a high level of talent coupled with very strong experience, which will assist in our efforts to transform our Company and drive growth across the business.”

Third Quarter 2017 Results

Total revenues for third quarter 2017 decreased 6.6% to $353.1 million, compared to $378.2 million for third quarter 2016. This included $7.6 million from the New York Daily News acquisition, which closed on September 3, 2017. Third quarter 2017 advertising revenue was down 14% on a year-over-year basis.

Total operating expenses, including depreciation and amortization, for third quarter 2017 were $346.8 million, down 8%, compared to $377.4 million for third quarter of 2016, reflecting continued cost reduction efforts.

Net income for third quarter 2017 was $2.1 million, or $0.06 per share, compared to a net loss $10.5 million, or $0.29 per share, for third quarter of 2016. Adjusted EPS for third quarter 2017 was $0.17, down 23% on a year-over-year basis.

Adjusted EBITDA for third quarter 2017 was $35.3 million, compared to $36.6 million for third quarter 2016.

Net cash provided by operating activities was $10.2 million for third quarter 2017.  Capital expenditures totaled $3.8 million  for the quarter. Debt and pension liabilities were increased by $19 million during the quarter, compared to second quarter 2017. Net debt decreased $10.7 million in third quarter 2017 compared to second quarter 2017.  Cash balance grew to $185.2 million.

Segment Results

The Company operates in two segments: troncM, which is comprised of the Company’s media groups excluding their digital revenues and related expenses, except digital subscription revenues when bundled with a print subscription, and troncX, which includes all digital revenues and related expenses of the Company from local tronc websites, third party websites, mobile applications, digital only subscriptions, Tribune Content Agency, The Daily Meal and forsalebyowner.com.

Included in the tables below is segment reporting for troncM and troncX for the third quarters of 2017 and 2016. Third quarter 2017 troncM total revenues decreased 8% to $297.3 million, compared to third quarter 2016. Advertising revenue for third quarter 2017 declined by 18% on a year-over-year basis, which was partially offset by an increase of 5% in circulation revenues. Operating expenses declined by $24.4 million, or 8%, compared to the prior-year quarter, primarily due to decreases in almost all expense categories. Income from operations for troncM was $14.8 million or a 9% decline from the prior-year quarter. Adjusted EBITDA for troncM for the third quarter 2017 was $28.7 million, down 7% on a year-over-year basis.

Total revenues for troncX for the third quarter of 2017 were $56.5 million, down 1% from prior-year quarter. Advertising revenues for troncX declined by 4%, while content revenues, which includes digital only subscriptions and content syndication, increased by 13.6%.  Income from operations for troncX was $5.4 million, an increase of 12% from the prior-year period. Adjusted EBITDA for third quarter 2017 was $10.9 million, up 19% compared to third quarter 2016.

Total third quarter 2017 average monthly unique visitors were 81.3 million, up 36% from the prior-year quarter. Digital only subscribers grew to 265,000, up 95% from the prior year and up 20% sequentially, before including any contribution from the New York Daily News.

2017 Outlook

2017 full year guidance for total revenues is a range of $1.525 to $1.540 billion and adjusted EBITDA is a range of $189 to $195 million.

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