Dow Jones Reports Profit Down, Income Up

By: Dow Jones & Co., which is considering a bid to be bought by Rupert Murdoch's News Corp., reported lower second-quarter profits Thursday due to an accounting charge, but revenues and operating income rose.

The company, which publishes The Wall Street Journal, Barron's, Dow Jones Newswires and a group of stock market indicators, earned $21 million or 25 cents per share on a net basis in the three months ending in June, down from $28.8 million or 34 cents per share, in the same period a year ago.

Excluding one-time charges and other non-operating effects in both periods, operating income rose 28.2 percent to $66.3 million from $51.7 million in the same period a year ago, driven partly by the acquisition of the other half of Factiva, a news database business, that it didn't already own.

The company said it recorded a charge in the second quarter of 13 cents related to additional stock-based compensation costs due to the sharp increase in the value of its shares since News Corp.'s offer to acquire the company at $60 per share became public in early May. The shares had been trading in the mid-$30s range prior to that. Dow Jones also recorded a restructuring charge of 7 cents per share.

The earnings worked out to 45 cents per share excluding the one-time items, a penny ahead of the estimate of analysts surveyed by Thomson Financial and up from 39 cents per share in the same three-month period in 2006.

Revenues rose 16.2 percent to $529.7 million from $456 million, which the company attributed to the consolidation of Factiva as well as growth at its indexes business and in international media, including the acquisition of eFinancialNews, a U.K.-based business news provider.

That growth was offset partly by a 6.8 percent decline in print advertising revenue in the U.S. edition of The Wall Street Journal, Dow Jones' flagship property, and a decline of 8 percent in advertising revenues at its community newspaper group.


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