LOS ANGELES -- Times Mirror Co., the nation's No. 3 publisher of newspapers, said yesterday that fourth-quarter profit fell nearly 12 percent because of higher interest expense from new debt to fund a transaction with its controlling Chandler family.
Profit from continuing operations fell to $67.5 million from $75.5 million in the year-earlier period. A decrease in the number of shares outstanding caused per-share profit to rise to $1.03 from 87 cents, matching analysts' estimates.
Times Mirror and the Chandler family last year transferred $2.5 billion in cash, investments and stock to a new partnership as part of a recapitalization that cut the number of Times Mirror's shares outstanding and its preferred dividend payments.
It also raised the company's debt load and reduced its available cash. Ad sales at the company's flagship Los Angeles Times rose 11 percent in the quarter after weakness earlier in the year.
"The key is the Los Angeles Times. They have been able the last couple of quarters to beat expectations on the profitability in Los Angeles," said Steven Barlow, an analyst at Credit Suisse First Boston.
Revenue rose 12 percent to $836.6 million from $750.1 million.
Times Mirror's debt rose 46 percent to $1.82 billion at year-end from $1.25 billion a year earlier. Cash and marketable securities were $144 million, down from $1.10 billion.
Newspaper companies are benefiting from strong advertising demand, an offshoot of a robust U.S. economy and a flood of new Internet companies looking to gain name recognition by taking out ads in traditional media such as newspapers, magazines and radio.
Times Mirror, which also publishes The Sun and Newsday on New York's Long Island, matched earnings expectations of $1.03 a share, the average estimate of analysts surveyed by First Call/Thomson Financial.
Net income for the quarter was $67.9 million, down 72 percent from $246.3 million a year earlier, when the company reported an after-tax gain of $232.6 million from sold and discontinued businesses.
The company treated Achieve- Global, Allen Communications and Staywell -- three businesses it is in the process of selling -- as discontinued operations. The Sporting News, which is also up for sale, was not considered a discontinued operation.
Times Mirror shares fell $1.125 to $58.8125. The stock has risen about 10 percent over the past 12 months.