By: Mark Fitzerald Dow Jones & Company reported Thursday that its third quarter earnings were 15 cents per diluted share, up 7% from the same period last year when special items are excluded.
The big financial publisher said revenue was up 5% over 2003's third quarter to $394.9 million. Operating income was up 21.5% over last year to $20.4 million. Operating margins were 5.2%, compared to 4.5% last year.
Driving the increase, Dow Jones said, was improved revenues, profits, and margins from Ottaway Community Newspapers and its electronic publishing units. Overall, print publishing revenue declined $4.0 million, or 1.9%, in the third quarter compared to the year-ago period. Advertising linage at the flagship Wall Street Journal decreased 6.0% in the quarter and was down 10.2% for the month of September, Dow Jones said. Ad pages at Barrons were down 5.1% for the quarter.
"Our results were negatively affected by very weak technology advertising, which led to a 6% decline in ad linage at The Wall Street Journal in the quarter, after four consecutive quarterly gains," said Peter R. Kann, chairman and chief executive officer of Dow Jones. "Thus, B2B advertising remains volatile. Nonetheless, we're pleased to have more than offset this decline as we increased total company revenue and operating income. Strong advertising yield, continued improvements in electronic publishing and Ottaway Community Newspapers, and stringent cost management across the company all contributed."
The third quarter is traditionally the weakest quarter for print publishing, and overall the segment had an operating loss of $16.6 million, Dow Jones said. That compares with an $11.5 million loss in the same period last year.
At the 15-newspaper Ottaway chain, third-quarter revenue increased 5.6% from the year-ago period to $87.6 million, with operating income up 7.9% to $23.5 million. Ottaway's operating margin of 26.8% was up over last year's 26.2%. Advertising linage increased 4.9% in the third quarter, and growth accelerated in September, with linage up 8.8%.
Paid subscribers to The Wall Street Journal Online grew to 701,000 as of Sept. 30, up 2.2% over September 2003.
In a conference call with analysts Thursday morning, Dow Jones executives said the three "Personal Journal" sections run during the week in the Wall Street Journal are now generating about as much revenue as the "Weekend Journal" section.
Journal Publisher Karen Elliot House said advertiser reaction to the recently announced Weekend Edition, which launches in September 2005, has been "really phenomenal."
"The interest certainly has been from the consumer advertisers, but there's also been interest from some financial advertisers, too," she said. Readers are ready for the product, House added: "Our circulation people have already gotten angry calls from people who said they didn't get their Saturday edition. They've missed that it's (launch is) '05, not '04."
Dow Jones said that it expects earnings per share before
special items in the fourth quarter of 2004 to be up slightly over the 43 cents per share earned in the fourth quarter of 2003. "This assumes fourth quarter 2004 linage at the U.S. Wall Street Journal will be down slightly compared to the fourth quarter of 2003," the company said.
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