Dow Jones CEO ‘Encouraged’ by Earnings Rise

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By: Seth Sutel, AP Business Writer

(AP) Dow Jones & Co., publisher of The Wall Street Journal and other financial publications, reported Tuesday that its net earnings tripled in the fourth quarter largely due to a one-time gain from the sale of its stake in the German publisher Handelsblatt.

The company also warned investors that its first-quarter earnings would likely be below analysts’ expectations.

Dow Jones’ earnings jumped to $44.3 million from $15.2 million in the same three-month period a year ago as the company exchanged its stake in Handelsblatt for a larger interest in The Wall Street Journal Europe.

In the year-ago quarter, the company also recorded charges related to job cuts and a lease write-off as well as an insurance gain related to damage at its headquarters in the Sept. 11 terrorist attacks.

Excluding the one-time effects in both periods, earnings rose 27% to $55.3 million from $43.6 million in the year-ago period. On a per-share basis, earnings rose to 43 cents from 34 cents, beating the 41 cent per share estimate of analysts surveyed by Thomson First Call.

Revenues rose 6% to $420.7 million from $396.9 million in the year-ago quarter, largely due to an 8% increase in advertising linage, or volume, at the Journal (Click for QuikCap). Journal linage jumped 19% in December, when it had one extra issue compared with the same month a year ago.

Dow Jones Chairman and CEO Peter Kann said in a statement that the company was “encouraged” by the improved results in the quarter and “somewhat pleased” with improving advertising trends at the Journal in the last half of 2003. “However, advertising volumes still are well below normal, and business confidence and spending commitments remain somewhat volatile,” Kann said.

The company also warned investors that its first-quarter earnings before one-time items would likely be in the mid- to upper teens in cents per share, compared with 12 cents in the year-ago period and below the current estimate of 21 cents per share as reported by Thomson First Call.

In early trading on the New York Stock Exchange, Dow Jones’ shares were up 21 cents to $51.68.

For the full year, Dow Jones’ net earnings fell to $170.6 million versus $201.5 million in 2002. Without special items, earnings rose to $124.5 million from $98.9 million, or 96 cents per share versus 74 cents per share.

Full-year revenues edged down to $1.55 billion from $1.56 billion in 2002.

In addition to the Journal, Dow Jones publishes Barron’s, Dow Jones Newswires, the Far Eastern Economic Review as well as several major stock market indicators, including the Dow Jones industrial average.

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