Tax Refund Bumps Dow Jones 4Q Profit Up 16%

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By: E&P Staff

Aided by a tax refund that added 11 cents per share to its earnings, Dow Jones & Co. reported fourth quarter 2005 earnings of $41.2 million, or 16% higher than the $35.6 million reported in the last quarter of 2004.

Earnings per share increased to 49 cents, compared to 43 cents a year ago.

Total revenue increased 10.3% from the 2004 fourth quarter to $482.2 million, mostly because of two key corporate initiatives during 2005: the acquisition of MarketWatch and the launch, in September, of the Weekend Edition, the first Saturday edition of its flagship Wall Street Journal in decades.

Dow Jones said “planned losses” from Weekend Edition were about 5 cents per share in the fourth quarter.

Print publishing revenue increased 4.7% from the same quarter in 2004 to $259.5 aided by increased revenue in the U.S. and international editions of the Journal. Dow Jones said advertising linage at the U.S. edition, including the Saturday paper, increased 8.1% and was up 17.0% in December. Linage of the international editions was up 20.6% for the quarter, but decreased 10.2% at its weekly Barron’s.

At the Ottaway Newspapers chain of community papers, revenue was up slightly to $88.5%, Dow Jones said. The group’s operating margin slipped to 23.6% compared to 26.6% last year because of higher newsprint prices, circulation cost increases, labor cost increases, and expenses related to its Internet initiative, the company said.

For the full year 2005, Dow Jones said, company earnings per share were 73 cents, compared to $1.21 in 2004.

Dow Jones said it estimates first quarter 2006 earnings per share before special items to be in the low teens cents per share range compared to the 11 cents per share earned in the first quarter of 2005.

It said 2006 first-quarter losses will likely include losses of about 6 cents per share from Weekend Edition.

Dow Jones said it expects total linage at the U.S. Wall Street Journal including Weekend Edition will be up in the “mid-single digits percentage range” compared to the first quarter 2005.

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