Par­ent of Chron­i­cle posts an­other year of record earn­ings

Houston Chronicle - - BUSINESS - By Al Lewis al.lewis@chron.com twit­ter.com/tel­lit­toal

Hearst, owner of the Hous­ton Chron­i­cle and myr­iad other me­dia prop­er­ties, logged its sixth con­sec­u­tive year of record prof­its in 2016.

Rev­enue at the pri­vately held com­pany, how­ever, grew mod­estly to $10.8 bil­lion, up from $10.7 bil­lion in 2015.

The com­pany got a boost from the elec­tion cy­cle as well as its in­vest­ment in health care, said Steven R. Swartz, pres­i­dent and chief ex­ec­u­tive of­fi­cer.

“Our 30 Hearst Tele­vi­sion sta­tions, aided by a strong per­for­mance in po­lit­i­cal ad­ver­tis­ing thanks to our best-in-class po­lit­i­cal cov­er­age, and Hearst Health, our five health care data and soft­ware plat­form com­pa­nies, led the way with out­stand­ing rev­enue and profit growth,” he wrote in a let­ter to em­ploy­ees re­leased Fri­day morn­ing.

The com­pany also achieved stronger yearover-year re­sults from ESPN, Fitch Group, the Hearst Mag­a­zines divi­sion and Hearst News­pa­pers.

News­pa­per prof­its were up for the fifth con­sec­u­tive year, de­spite a chal­leng­ing en­vi­ron­ment for the news­pa­per in­dus­try and an oil re­ces­sion in Hous­ton, which is Hearst’s largest news­pa­per mar­ket.

Hearst com­pa­nies and di­vi­sions made more than $2 bil­lion in ac­qui­si­tions in 2016, grow­ing rev­enues and prof­its — a spree it ex­pects to con­tinue through­out 2017. The com­pany also spent nearly $200 mil­lion on cap­i­tal projects to strengthen its busi­nesses.

Hearst’s largest deal of the year was for CAMP, a cor­po­rate air­craft main­te­nance and safety data and soft­ware com­pany.

Other deals in­cluded: a ma­jor­ity stake in Lit­ton En­ter­tain­ment, the lead­ing pro­ducer of ed­u­ca­tional tele­vi­sion; a ma­jor­ity stake in Med-HOK, a soft­ware plat­form com­pany that helps health plans man­age pa­tients; Work Loss Data In­sti­tute, a fam­ily-run com­pany that pro­vides cru­cial health care data to the work­ers’ com­pen­sa­tion in­dus­try; and Poly­glot Sys­tems, which sim­pli­fies drug in­for­ma­tion for pa­tients and then trans­lates that data into 22 lan­guages.

Hearst News­pa­pers ac­quired Hous­ton Com­mu­nity News­pa­pers to help bet­ter serve the mar­ket around the Hous­ton Chron­i­cle. It agreed to ac­quire The Pioneer Group to en­hance its news­pa­per busi­ness in Michi­gan. And it pur­chased The Hour and Wil­ton Vil­lager, adding to its news­pa­per group in Fair­field County, Conn.

“While Hearst has al­ways been and al­ways will be a me­dia com­pany, the share of its prof­its com­ing from busi­ness data and soft­ware sys­tems has grown to an ex­pected 25 per­cent for 2017,” Swartz wrote. “Thus to­day, Hearst can truly say it is an in­for­ma­tion, en­ter­tain­ment and ser­vices com­pany, and that di­ver­si­fi­ca­tion of busi­nesses and skills is one of its great com­pet­i­tive ad­van­tages.”

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