Tribune Whiffs With Weak Q2 Results

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Did Sinclair Broadcast Group go to Chicago Canine Rescue and adopt a dog?


That’s what some investors might start to ask, given the Q2 results Tribune Media just posted.

Yes, the company’s net loss was narrower. Yes, the net loss failed to meet Wall Street estimates.

Tribune Media’s net loss of $30.4 million (35 cents per share) is a considerable improvement from the $161.56 million net loss ($1.76 per share) seen in Q2 2016.

Tribune’s Diluted EPS was 36 cents per share.

That’s a problem: The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of 43 cents per share. The results also missed the Thomson Reuters analysts’ estimate of 41 cents per share, and the FactSet consensus of 41 cents.

Overall, Tribune saw total operating revenue of $469.5 million, down from $479.8 million a year earlier. Adjusted EBITDA dipped to $95.4 million, from $125.1 million.

Driving Tribune’s revenues in the quarter — to the shock of no one — are retransmission revenues. In Q2, they came in at $105 million, a rise from $83.28 million in Q2 ’16.

This helped offset a dip in ad revenue to $312.86 million, from $338.22 million.

With Tribune Media’s sale to Sinclair on track despite vociferous opposition from DISH Network and the American Cable Association, as well as former FCC Commissioner Michael Copps, Tribune Media CEO Peter Kern said his company’s financial results for the quarter “reflect our focus on continued expense management and positioning the company for long-term profitable growth.”

He added that troubles at WGN America are in the past.

“While our overall performance was significantly affected by non-recurring expenses and accelerated amortization related to the shift in programming strategy at WGN America, those changes are now behind us, and we expect a much more profitable 2018 with more original hours than the network has ever carried,” Kern said.

Meanwhile, as of Wednesday (8/9) Tribune Media has received approximately $185 million in pretax FCC spectrum auction proceeds (including $21 million of proceeds received by Dreamcatcher Broadcasting LLC), with approximately $5 million in pretax proceeds remaining to be paid to the company.

Tribune expects to receive the remaining auction proceeds in the second half of 2017. It expects to use approximately $102 million of after-tax proceeds to prepay a portion of its debt.

Just before Wednesday’s Closing Bell on Wall Street, Tribune shares were down 35 cents to $40.52.

Sinclair intends to acquire Tribune in a deal valued at $3.9 billion.


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