By Yasufumi Saito
In its first report as a separate entity, Tribune Publishing Co. announced Wednesday drops in both fourth-quarter and full year profits and sales, mostly due to an advertising decline and its spinoff costs, and predicted further sales decline this year.
The shares plummeted about 10 percent at one point, before rebounding to close down about 3 percent.
For the quarter ended Dec. 28, profits plunged 54 percent to $15 million, or 60 cents per diluted share, from $32.7 million, or $1.29 per diluted share, in the year-ago period. Sales diminished 5.5 percent to $457 million from $484 million.
For the full year, net income decreased 54 percent to $42 million, or $1.66 per diluted share, from $94 million, or $3.70 per diluted share, in 2013, dragged down by “spin-related” and restructuring expenses of $41 million. Revenues fell 4.9 percent to $1.7 billion from $1.79 billion.
The Chicago-based company fell short of a single analyst’s profit estimate of $1.89 per a share.
The company owns 10 dailies, including the Chicago Tribune, Los Angeles Times and Baltimore Sun. The print operations were spun off in August 2014 from Tribune Media that owns broadcast operations.
A 1.9 percent, or $2 million, rise in circulation revenues couldn’t offset a 10.4 percent, or $30 million, drop in advertising revenues for the quarter. Sales from commercial printing and delivery fell 19.2 percent to $38 million.
The breakdown of quarterly advertising revenues shows that retail dropped 9.6 percent to $149 million, national fell 18.1 percent to $50 million and classified shrank 5.3 percent to $65 million.
The company said it expects revenues of between $1.65 billion and $1.67 billion in 2015, down at least 1.8 percent from $1.7 billion in 2014.
“Any successful journey takes time,” CEO Jack Griffin said in a teleconference with analysts, “and we have only just begun our transformation.”
During the fourth quarter, the company launched new digital platforms and mobile applications. Yearly digital revenue increased 4 percent to about $200 million, accounting for about 11 percent of total sales.
The company ended 2014 with 3.2 million digital registered users, including 659,000 paid digital users, up 8 percent from the third quarter, and 61,000 digital-only subscribers, up 11 percent and 24 percent from the third quarter and the last year, respectively.
“In 2015, Tribune Publishing will remain vigilant and focused on executing our comprehensive transformational plan, which includes accelerating our transition to digital,” said Griffin in a statement.
The stock closed Wednesday at $19. 69, down 2.81 percent, or 57 cents.