Tribune Co.'s profit falls 80 percent in 3Q


The Tribune Co. said yesterday that its quarterly profit plunged 80 percent, primarily because of a $150 million expense that it recorded after losing a tax case last month.

Chicago-based Tribune, the country's second-largest newspaper publisher and owner of Newsday, the Los Angeles Times and The Sun among its daily newspapers, posted a profit of $24 million, down from the $121.7 million it recorded during the corresponding quarter last year.

Two weeks ago, a federal tax court ruled that the 1998 divestiture of Matthew Bender legal textbooks by Times Mirror was not a tax-free reorganization but a sale, now subject to up to $1 billion in taxes by the Internal Revenue Service. Tribune, which is appealing the ruling, assumed liability when it bought Times Mirror in 2000.

The company said its newspaper ad sales rose 2 percent and settlements with advertisers concerning circulation overstatements at Newsday and Hoy are coming to a close. Sales at Tribune's television stations were down 6 percent.

"Our third-quarter results reflect the continuing soft ad environment, which is impacting both our newspaper and television groups," Tribune Chief Executive Dennis FitzSimons said in a conference call yesterday.

Still, Merrill Lynch analyst Lauren Rich Fine wrote in a report that newspaper ad sales were higher than forecast, but so were overall costs. The results from the television division matched expectations, which she called a "relief."

Tribune stock closed up 77 cents, or 2.4 percent, to $32.58 per share yesterday.

Monty Phan writes for Newsday.

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