Dow Jones Continues Slump In Q2

By: (AP) Dow Jones & Co., owner of The Wall Street Journal and other financial publications, reported a 25% jump in second-quarter earnings Thursday due to an asset sale.

But without the one-time gain, results continued to slump because of a dismal advertising climate, and the company warned that its results in the third quarter would be well below Wall Street's current forecasts.

Dow Jones reported net income of $54 million in the three-month period ending June 30, compared with $43.2 million in the same period a year ago. Per-share results were 64 cents versus 50 cents a share.

The results in the most recent period were boosted by a gain of $44.5 million from the sale of the company's Essex County newspaper properties in Massachusetts to the Eagle-Tribune Publishing Co.

Excluding that gain and other one-time factors from both periods, Dow Jones' income fell 53% to $21.4 million compared with $45.5 million in the same period a year ago. Per-share earnings came in at 25 cents, compared with 52 cents a year ago. Wall Street analysts had been expecting 22 cents a share.

Revenues for the quarter fell 14% to $417 million against $484.1 million in the same period a year ago.

While other newspaper publishers have seen some signs of improvement in their advertising outlook, Dow Jones continues to suffer because of its heavy reliance on financial and technology advertising, which is still in a deep slump.

"We continue to profitably navigate our way in the most difficult global advertising environment witnessed in my three decades in this business," Peter Kann, the company's chairman and chief executive, said in a statement.

Dow Jones reported that advertising linage, or volume, continued to slip at The Wall Street Journal due to an "extraordinarily difficult global advertising environment," though the company said it now expects those trends to "modestly improve" in the third quarter.

For the second quarter, Journal linage was off 20.8% on a per-issue basis, and down 18.5% in the month of June. For the third quarter, Dow Jones currently forecasts a decline of 8% to 12%.

As a result, Dow Jones said it now expects to report third-quarter earnings per share in the upper single-digit range, or just below 10 cents a share, versus 20 cents per share in the same quarter a year ago.

The estimate was far below the forecast of 31 cents per share reported by analysts polled by Thomson Financial/First Call. Dow Jones shares were off $2.22, or 5%, at $42.94 in early trading on the New York Stock Exchange.

For the first six months of the year, Dow Jones reported net income of $183.8 million or $2.17 per share, versus $49.4 million or 57 cents a share in the same period a year earlier. Excluding one-time items, six-month earnings were $28.3 million or 33 cents a share, down from $60.2 million or 69 cents a share.

Revenues for the first six months of the year were $809.9 million, down 14% from $944 million in the same period a year earlier.

In addition to the Journal, Dow Jones also publishes Barron's, Dow Jones Newswires, the Ottaway group of community newspapers, and many stock market indicators, including the Dow Jones industrial average. It also owns half of SmartMoney magazine along with Hearst Corp. and half of Factiva, a news database service, with Reuters.

On the net: http://www.dowjones.com