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Capital Cities-ABC Profit Falls 45% Due to Extraordinary Charge

October 29, 1986

Capital Cities-ABC said its third-quarter profit plunged 45% because of an extraordinary charge of $14.25 million.

The charge resulted from Capital Cities' settlement of litigation with 263 contract carriers for the Kansas City Star, one of Capital Cities' newspapers, ending an eight-year dispute.

Capital Cities said its net income for the three months ended Sept. 28 came to $18.37 million, compared to $33.44 million in the same period a year ago.

The settlement with the carriers will allow the Kansas City Star to convert virtually all of its newspaper delivery routes from those operated by independent contract carriers to routes operated by delivery agents.

Without that charge, profit edged down 2.5%, the company said.

Revenue for the quarter almost quadrupled to $959 million from $248 million.

Operations of American Broadcasting Cos., which Capital Cities Communications acquired in January, are included in the 1986 results.

The ABC television network continues to be affected by relatively weak demand for network advertising, Capital Cities said. Third-quarter results for all other broadcasting units and publications were generally ahead of expectations, the company said.

Results for Capital Cities' publishing division, excluding the ABC publishing group, decreased moderately, principally due to weakness in advertising demand, it said.

In addition to the ABC network, Capital Cities operates eight affiliated TV stations, seven radio networks and 19 radio stations, and provides programming for cable television.

The company also publishes nine daily newspapers, 40 weekly newspapers, shopping guides and other publications.

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