Sept. 20 (Bloomberg) -- Tribune Co., the publisher of the Chicago Tribune and the Los Angeles Times, said revenue declined 5.2 percent last month because of a drop in classified advertising.
Sales from publishing and broadcasting fell to $391.2 million, Chicago-based Tribune said in a statement today. Newspaper ad sales fell 7.2 percent.
Tribune, which is being bought by a group of investors led by billionaire Sam Zell, said sales were hurt by declining real estate ads. While the drop classifieds was greater than in july, the results indicate Tribune can stay within loan agreements to complete the deal, said Mike Simonton, a bond analyst at Fitch Ratings. National and retail ad sales rose again.
``Classified is a category, particularly real estate, we can point to as very cyclical, but these numbers are even worse than before,'' said Simonton, who is based in Chicago. He rates Tribune's debt B+, with a negative outlook.
Tribune fell 41 cents, or 1.5 percent, to $27.37 at 4:01 p.m. in New York Stock Exchange composite trading.
The stock has been trading below the buyout price of $34 partly on concern that further ad losses may prevent Tribune from complying with loan covenants and getting the $4 billion bank financing needed to close the deal.
Classified ad sales fell 20 percent, led by a 30 percent slump in real estate. Los Angeles, Chicago and Florida were the hardest hit, Tribune said.
Retail advertising rose 0.6 percent after declining 6 percent in July and 5.3 percent in the second quarter. National ads gained 2.8 percent last month after falling 3.7 percent in July and 11 percent in the second quarter.
``This could be an indication of some stabilization,'' Simonton said.
Circulation revenue fell 4.8 percent, Tribune said. Publishing revenue dropped 6.1 percent, while sales at the broadcast division declined 3 percent.
Television revenue dropped 4.6 percent on declining political and movie ads, said Tribune, the owner of 23 TV stations as well as the Chicago Cubs.
Tribune shareholders approved the $8.2 billion buyout of the company last month.
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