Dow Jones profit tops estimates
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By Robert MacMillanNEW YORK (Reuters) - Dow Jones & Co. Inc. , publisher of the Wall Street Journal, reported quarterly earnings on Tuesday that beat expectations on higher revenue and cost cuts, sending shares up as much as 6 percent.Higher revenue from the Factiva online news archive and other Web businesses helped offset a 1.8 percent decline in advertising revenue at its flagship Wall Street Journal newspaper in the United States.Dow Jones is the first U.S. newspaper publisher to report quarterly earnings this season. Others due this week include New York Times Co. , Tribune Co. and Gannett Co. Inc. First-quarter net income fell to $22.6 million, or 27 cents a share, from $61.5 million, or 74 cents a share, a year earlier.Excluding special items, earnings were 24 cents per share compared with 14 cents a year ago and topped analysts' targets by 5 cents a share, according to Reuters Estimates.Revenue rose 17.9 percent to $507.2 million, compared with the Wall Street estimate of $508 million.Revenue from the Dow Jones's consumer group, including the Journal and business weekly Barron's, was disappointing, said Wachovia analyst John Janedis.But the unit beat expectations for earnings before interest, taxes, depreciation and amortization (EBITDA) because of savings from shrinking the Journal's page size and lower delivery and marketing costs, Janedis wrote in a client note.Analysts expect print ad sales to continue their slow erosion as more people opt to get news online. Newspapers have beefed up their Internet offerings to capitalize on fast-growing Web advertising, but the revenue is years away from catching up to levels at their print editions."I think you are going to see a rather mediocre quarter," said Benchmark Co. analyst Ed Atorino. "If the companies come pretty close to expectations, it will be a positive quarter."ELECTRONIC MEDIA BOOSTDow Jones has sought to boost revenue from electronic media as ad sales languish at the Journal and its local newspapers with the migration of readers to the Internet."This is the latest indicator that our transformation plan -- aimed at diversifying our heavy reliance on traditional print revenue -- is working," Dow Jones Chief Executive Richard Zannino said in a statement.By segment, Enterprise media revenue, including Factiva, surged nearly 79 percent to $173.2 million, while local media revenue dropped 3.5 percent to $55.5 million. The company agreed to buy Reuters Group Plc's 50 percent stake in Factiva in late 2006.Consumer media revenue rose 1.7 percent to $280.4 million, helped by the Dow Jones Online business. Paid subscriptions to the online Journal rose 20 percent to 931,000, boosted by a promotion and a change in how it counts registered users.Sales of higher-priced ads, including front-page and color advertising, appear to be doing well, said Benchmark's Atorino. Also, the Journal is not as dependent as other newspaper publishers on classified ads, he added.Dow Jones shares closed up $1.13, or 3.2 percent, to $36.24 on the New York Stock Exchange after hitting a session high of$37.14.(Additional reporting by Michele Gershberg)
(c) Reuters 2007. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
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