Tribune posts $1.82B 1Q gain on tax status change; sales ebb

The newly private media conglomerate released quarterly numbers that were consistent with Chairman and Chief Executive Sam Zell's comments last month about the rapid deterioration of its revenues, which have prompted him to consider selling more assets than originally planned.

The huge, tax-related gain compared with first-quarter earnings of $11 million a year ago. It resulted almost entirely from an income tax adjustment of $1.86 billion related to the company's change in tax status at the beginning of the year to a subchapter S corporation.

Tribune, however, had a loss from continuing operations before income taxes of $30 million -down from income of $31 million in the same period of 2007.

"Print ad revenues continue to be challenged by the weak economy's impact on real estate and classified advertising," Zell said in a statement. "Broadcasting operating results are notably more stable."

He said the company continues to make significant progress on its strategy to transform operations.

Tribune's advertising revenues were down 15 percent in the quarter, contributing to an 11 percent drop in operating revenues from its publishing division, to $823 million from $926 million a year earlier. That unit, which consists of the Los Angeles Times, the Chicago Tribune, Newsday and other newspapers, saw operating profit decline 74 percent to $37 million.

Circulation revenue decreased 3 percent.

The broadcasting and entertainment division, which includes Tribune's 23 television stations, had a 3 percent increase in operating revenue to $292 million, led by higher national advertising revenue for TV. Operating profit more than doubled to $135 million from $61 million.

Tribune is moving toward sales of both Newsday and the Chicago Cubs baseball team.