Dow Jones & Co., the publisher of the top US business daily The Wall Street Journal, has announced that first-quarter profit fell 54 percent as advertising sales fell at the newspaper.
|What the company says about itself: Dow Jones & Company, which is listed on the New York Stock Exchange under the ticker symbol DJ, publishes the world's most vital business and financial news and information. Since 1882, the Dow Jones name has been synonymous with accuracy, integrity and trust. Founded in 1889, The Wall Street Journal, the flagship publication of Dow Jones & Company, is the world's leading business publication. The Journal reaches the nation's top business and political leaders, as well as investors across the country. Holding 31 Pulitzer Prizes for outstanding journalism, the Journal seeks to help its readers succeed by providing essential and relevant information, presented fairly and accurately, from a dependable and trusted source. The Wall Street Journal Weekend Edition, which is launching in September 2005, will be the complete weekend guide to business and the business of life for Wall Street Journal readers.|
Net income fell to $8.18 million, or 10 cents a share, from $17.8 million, or 22 cents, a year earlier, Dow Jones said today in a statement . Sales rose 2.6 percent to $412.1 million.
A slump in national advertising from IT-related and financial services companies, which in 2004 bought 31 percent of the ad space at the Wall Street Journal, impacted earnings. Ads from technology companies fell 25 percent in January and February, while financial ads declined 18 percent, the company has said.
Print Publishing revenue of $216.7 million in the first quarter of 2005 declined 8.8% versus the same period a year ago. Advertising linage at the U.S. Wall Street Journal decreased 8.0% (down 9.9% in March) while linage at the international editions of the Journal decreased 14.8% with two fewer issues (down 26.0% in March with two fewer issues). Barron's advertising pages decreased 12.9% in the quarter (down 33.7% in March with one fewer issue). Print Publishing had an operating loss of $7.1 million in the first quarter, compared to income of $4.6 million in the first quarter of 2004.
Electronic Publishing revenue of $117.2 million in the first quarter of 2005 increased 35.7% from the same period a year ago, driven by the acquisitions of MarketWatch, Alternative Investor and vwd, together with increased revenue in all electronic publishing business units. Operating income of $21.5 million in the first quarter of 2005 increased 15.9% over last year primarily due to growth at both Consumer Electronic Publishing and Indexes. Operating margin of 18.3% in the first quarter of 2005 was down from the previous year's 21.4%. Excluding acquisitions, revenue was up 8.0%, operating income increased 12.4% and operating margin was up 90 basis points to 22.2%. Terminal counts at Newswires were up 3.8% compared to last year. Paid subscribers to The Wall Street Journal Online grew to 731,000 as of March 31, 2005, up 5.2% from the prior year period.
Ottaway Community Newspapers' revenue of $78.2 million in the first quarter of 2005 increased 0.6% from the same period a year ago. Operating income of $13.3 million was down 21.5% and operating margin was 17.1% versus 21.8% last year due to higher newsprint prices and planned expenses related to a new internet initiative and content management system. Advertising revenue was up 1.9% on higher preprint revenue and ad rates, partially offset by a 2.6% decrease in linage in the first quarter (linage was down 2.1% in March).The Company ended the first quarter of 2005 with $615 million in debt compared to $258 million at the end of the first quarter of 2004. This increase is mainly due to the incurrence in January 2005 of an additional $439 million in debt to finance the Company's acquisition of MarketWatch.
Commenting on first quarter results, Peter R. Kann, chairman and chief executive officer of Dow Jones, said, "We continue to battle a persistently difficult B2B print advertising climate particularly in the technology category. However, heading into the second quarter, we are cautiously optimistic that advertising trends will improve. Meantime, we will remain sharply focused on controlling costs, improving the quality of our products, integrating our acquisition of MarketWatch and launching Weekend Edition in September — both of which are proceeding in line with our expectations."
Dow Jones said it estimates second quarter 2005 earnings per share before special items to be in the mid-to-upper 30 cents per share range before dilution from Weekend Edition and MarketWatch, compared to the 41 cents per share earned in the second quarter of 2004. After dilution from Weekend Edition and MarketWatch, the Company expects second quarter 2005 earnings per share in the low-to-mid 30 cents per share range. This assumes second quarter 2005 linage at the U.S. Wall Street Journal will be down in the low single digit percentage range compared to the second quarter of 2004.
Charles Dow and Edward Jones were the first to create an index measuring the activity of the New York Stock Exchange. The original 11 companies in this first Dow Jones Index were Western Union, Pacific Mail Steamship and nine railroads.