Tribune Media Company (NYSE: TRCO) reported a 60% dip in earnings for the fourth quarter of 2018 due to an income tax expense compared to a benefit in the previous year quarter. However, the results exceeded analysts’ expectations.
Net income plunged by 59.6% to $132.8 million and earnings plummeted by 59.7% to $1.50 per share. Adjusted earnings soared 91.4% to $1.55 per share.
In the fourth quarter of 2017, the company recorded a tax benefit of $256 million or $2.90 per share related to the remeasurement of deferred tax assets and liabilities resulting from the new tax legislation that lowered corporate income tax rate from 35% to 21%.
Consolidated operating revenues grew by 18% to $578.7 million. This was primarily driven by higher political advertising revenues, retransmission revenues and carriage fee revenues. This was partially offset by a decrease in core advertising revenues and the absence of barter revenues. Excluding fourth-quarter 2017 barter revenues, operating revenues increased by 20%.
For the fourth quarter, revenue from Television and Entertainment increased by 19% year-over-year, driven by an 82% jump in political advertising revenue, a 10% increase in retransmission revenues and a 23% jump in carriage fee revenues. This was partially offset by a 4% decline in core advertising revenue. Real estate revenues plunged by 40% primarily due to the loss of revenue from real estate properties sold during 2017 and 2018.
Despite substantial political displacement, core advertising remained solid, delivering positive year-over-year growth from Election Day to the end of the year, a trend the company expects to continue in the first quarter of 2019.
On February 21, 2019, the board of directors declared a quarterly cash dividend on the company’s common stock of $0.25 per share. The dividend will be paid on March 25, 2019, to holders of record of its common stock and warrants as of March 11, 2019.
On November 30, 2018, the company entered into the Nexstar Merger Agreement with Nexstar and Titan Merger Sub providing for the acquisition by Nexstar of all of the outstanding shares of the company’s Class A common stock and Class B common stock, by means of a merger of Nexstar Merger Sub with and into Tribune Media Company, with the company surviving the merger as a wholly-owned subsidiary of Nexstar.
In light of the company’s previously announced transaction with Nexstar, Tribune Media is not providing financial guidance for the full year 2019, nor is conducting a conference call regarding its fourth quarter and full year 2018 financial results.
Shares of Tribune Media ended Thursday’s regular session up 0.04% at $46.23 on the NYSE. Following the earnings release, the stock inched up over 1% in the premarket session.