Tronc Reports 95 Percent Increase in Digital-Only Subscribers in Q3

Media company Tronc, formerly Tribune Publishing, (NASDAQ: TRNC) had some big news to report for its third quarter ended September 24, 2017. In addition

Subscription News: Tronc Reports 95 Increase in Digital-Only Subscribers in Q3

Source: Tronc

Media company Tronc, formerly Tribune Publishing, (NASDAQ: TRNC) had some big news to report for its third quarter ended September 24, 2017. In addition to acquiring the New York Daily News, Tronc noted digital-only subscribers of 265,000, a 95 percent increase year-over-year, not including additional subscribers from the acquisition. Tronc also reported total revenue of $353.1 million, a 6.6 percent decrease compared to the same period last year. Despite that drop, Tronc had net income of $2.1 million, or $0.06 per share, compared to a net loss of $10.5 million, or $0.29 per share, for the same period last year.

Tronc CEO Justin Dearborn commented on the results in a press release:

‘I am pleased with the strategic actions we took during the quarter to better align our company with industry trends. The acquisition of the New York Daily News provided us with another strategic platform for growing our digital business, expanding our reach and broadening our services for advertisers and marketers. We now serve 10 major U.S. markets, including each of the top three, hold 105 Pulitzers and have over 81 million unique monthly digital visitors,’ Dearborn said.

Other financial highlights for the quarter included:

  • The New York Daily News contributed $7.6 million in revenue in the third quarter. The deal closed on September 3, 2017.
  • Third quarter advertising revenue was down 14 percent.
  • Total revenue from TroncM was $297.3 million, an 8 percent decrease year-over-year. TroncM includes the company’s media groups excluding digital revenue except for digital subscription revenue when bundled with print subscriptions.
  • Advertising revenue for TroncM was $127.4 million, compared to $154.5 million for Q3 2016.
  • Total revenue from TroncX was $56.5 million, a 1 percent decrease year-over-year. TroncX includes all digital revenue from local Tronc websites, third-party websites, mobile apps, digital-only subscriptions, Tribune Content Agency, The Daily Meal and ForSaleByOwner.com.
  • Advertising revenue for TroncX was $45.4 million, compared to $47.3 million for Q3 2016.
  • Total operating expenses were $346.8 million, compared to $377.4 million for Q3 2016, representing an 8 percent decrease.
  • The company’s adjusted EBITDA was $10.9 million.
  • The company reported total assets of $872.6 million, compared to $888.8 million for Q3 2016.

Operational highlights for the third quarter included:

  • The closing of the acquistion of the New York Daily News was the biggest highlight of the quarter.
  • Average monthly unique visitors were $81.3 million, a 36 percent increase year-over-year.
  • Tronc reported Ross Levinsohn as CEO and publisher of the Los Angeles Times Media Group, Lewis D’Vorkin was named editor-in-chief, and Mickie Rosen was named President.

Subscription News: Tronc Reports 95 Increase in Digital-Only Subscribers in Q3

Source: New York Daily News

‘Each of them brings a high level of talent coupled with strong experience, which will assist in our efforts to transform our company and drive growth across the business,’ said Dearborn.

For the full year, Tronc estimated that total revenue would range between $1.525 billion and $1.540 billion, and adjusted EBITDA would range between $189 million and $195 million.

Despite Tronc’s big turnaround compared to the third quarter of 2016, investors did not have an equally significant reaction to the news. On November 1, the day third quarter financials were released, Tronc stock was valued at $14.75 per share, a $0.04 decline over the previous day. As of 4:01 PM Eastern yesterday, Tronc stock was valued at $15.38 per share.

Subscription News: Tronc Reports 95 Increase in Digital-Only Subscribers in Q3

Source: Google Finance

Insider Take:

With million-dollar losses and its failure to acquire the Chicago Sun-Times, a competitor to Tronc-owned Chicago Tribune, Tronc has had an interesting year. It has seemingly turned things around, posting a net gain and acquiring the New York Daily News in the third quarter. The newspaper has already contributed to company revenue. Coupled with savings from operational expense cuts and growth in its digital-only subscribers, Tronc is marching toward a stronger digital future in 2017, following a transitional year in 2016.

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