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Tribune Posts Higher Profit, Stays Mum

The publisher provides no update on its sale process.

Updated from 10:01 a.m. EST



reported a 78% jump in fourth-quarter earnings, but continued weakness in its newspaper ad sales could bode ill for its ongoing efforts to sell the company.

The media conglomerate provided no update on the sale process, although it has said it will come to a resolution in the first quarter.

For the fourth quarter, Tribune posted net income of $239.1 million, or 99 cents a share, up from $134.4 million, or 43 cents a share, a year earlier.

The results included a bevy of gains and charges from investment activity, restructuring efforts and asset sales. Excluding those items, the company earned 68 cents a share in the quarter.

Revenue rose to $1.47 billion from $1.39 billion a year earlier

Analysts, on average, had expected operating earnings of 61 cents a share and revenue of $1.4 billion, according to Thomson Financial.

Citigroup analyst William Bird said in a research note that the positives in Tribune's performance were mainly the result of tighter expense management.

The company, which publishes the

Chicago Tribune

and the

Los Angeles Times

, said fourth-quarter advertising revenue at its newspapers increased 4% for the quarter. Excluding an extra week of selling time, however, ad revenue was down 3% for the period.

Its broadcasting and entertainment segment's revenue rose 11% to $356 million.

On a conference call with analysts, Tribune executives provided no financial guidance, but they indicated that January was off to a slow start and the industry outlook for 2007 remains challenging.

"The results at the television business looked okay, and there are signs that movie ads are coming back to the L.A. Times, so that could be a turnaround situation," says Edward Atorino, analyst with the Benchmark Company. "Overall, the business seems to be bottoming out. Circulation is starting to stabilize and costs are being screwed down. If they could get a break from the bad economic conditions, things could really start to show some improvement."

Tribune's operating results are overshadowed on Wall Street by the company's efforts to sell itself amid a sharp downturn in the newspaper business. Bear Stearns analyst Alexia Quadrani wrote in a research note that despite the upside in Thursday's report, "the current stock valuation already reflects the anticipation of the company pursuing a value enhancing strategic option."

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The selling process began last summer when Tribune's largest shareholder, the Chandler family, called on the company in public to take restructuring efforts to resuscitate its lagging stock price.

Scattered details of the negotiations have leaked out in the media, and so far, it is widely viewed as a disappointment. That view was bolstered when the Chandler family trust announced a bid to buy the company in a deal valued at $31.70. Previously, when the trust was arguing for a sale, it said a private equity buyer would pay at least $35 a share for it.

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Chairman Rupert Murdoch, who has been named as a potential partner in the deal proposed by the Chandler trust, told investors at a New York media conference that he doubts the offer will be accepted, according to a report from


. Murdoch's media empire publishes the

New York Post

, and there is speculation that he has his eye on Tribune's Long Island tabloid,



Other buyers that have expressed interest in Tribune include L.A. moguls David Geffen and Ron Burkle. The

Chicago Tribune

reported Wednesday that real estate investor Sam Zell has emerged as a potential new bidder for Tribune following giant sale of his company,

Equity Office Properties



"I don't see

Tribune taking anything near the current market price for the company," says Atorino. "If they don't get an offer in the mid to high $30-range, I think they'll scrap the sale process, maybe dump some assets, but basically continue to run the company."

Shares of Tribune recently were down 19 cents to $30.76.