Biz Briefs

Jul 21, 2003  •  Post A Comment

Wall Street may be having a change of heart when it comes to AOL Time Warner. Influential Merrill Lynch analyst Jessica Reif Cohen has upgraded her rating on AOL shares to “buy” from “neutral,” and raised her price target 47 percent to $24 a share, saying the beleaguered media giant has made significant progress in fixing its balance sheet and gaining control of its cost structure.
The analyst raised her projected levels of earnings before interest, taxes, depreciation and amortization by $136 million in 2003 to $9.3 billion, and by $200 million to $10.3 billion in 2004.
Profits up at Tribune, Scripps, Gannett
Tribune, the Chicago-based company that owns 12 daily newspapers and 26 television stations, last week reported a 100 percent jump in second-quarter profit to $229.5 million, or 67 cents a share, from a year-earlier profit of $114.2 million, or 33 cents a share. The results reflect strong performance at both the newspaper and TV operations, the company said. Revenue advanced 5 percent to $1.45 billion, from a $1.38 billion a year ago.
Meanwhile, Scripps, which owns 21 newspapers, 10 television stations and a collection of cable channels, reported a 140 percent jump in profit to $64.7 million, or 80 cents a share, vs. nearly $27 million, or 33 cents a share, in 2002. Revenue climbed nearly 25 percent to $474.8 million from a year-earlier level of $380.4 million. The numbers were propelled by strong results at cable channels HGTV and Food Network. But the company warned that third quarter is likely to fall short of expectations.
Gannett said its second-quarter profit rose 7 percent to $324.3 million, or $1.21 per share, from a year-earlier profit of $303.9 million, or $1.14 per share. Revenue rose 4 percent to $3.3 billion. The company said its television group recorded a 1 percent increase in revenue to $192.7 million, while operating income and cash flow each climbed 1 percent to $95.6 million and $102.2 million, respectively.
The New York Times Co. saw its profit fall 7 percent to $72.8 million, while revenue rose 7 percent to $671.8 million. The company blamed the profit drop on Iraq War-related advertising weakness and the absence of political advertising at its broadcast group.
Charter debt downgraded; key exec exits
Credit rating agency Standard & Poor’s downgraded the debt rating of Microsoft co-founder Paul Allen’s troubled cable operator Charter Communications to CC from CCC-plus, saying that a previously announced $1.7 billion debt offering could cause more problems than it solves. S&P’s move puts the company deeper into so-called “junk” status, in which companies borrowing debt pay among the highest interest rates and fees in order to compensate investors for taking on the risk.
The downgrade came as the company announced that its chief technology officer, Stephen E. Silva, was quitting the company for personal reasons, marking the latest in a string of personnel changes at the firm since a management reorganization was launched in December.