Dow Jones (NYSE:DJ) turned in third-quarter results that met investors' forecasts, although the financial news giant continued to sound the alarm over shaky advertising sales. With the equity markets in neutral and the Securities and Exchange Commission investigating circulation trends, caution appears justified.
The firm announced that it earned $0.15 per share in the quarter versus $0.14 in the same period last year. Revenue, meanwhile, increased 5% to about $395 million. Dow Jones suggested, though, that the improvements were in part due to its cost control efforts rather than an improving business environment. At best, trends remain uncertain, as its publications are buffeted by "very weak" technology advertising. Results in the company's print segment were particularly soft as revenue declined 2% and the unit's loss widened year over year.
Some of Dow Jones' suffering may be connected to its investment focus. After a robust 2003, the Dow Jones Industrial Average and Nasdaq are both down so far this year. Although it's by no means certain why advertisers have cut back on purchases, they may be guessing that interest in investment news is down because of uncertain market conditions, and as a result, they could be shifting spending to other publications. Gannett (NYSE:GCI), for instance, recently disclosed that advertising for its flagship publication USA Today rose 6% in the third quarter.
Adding more uncertainty to the picture is the Securities and Exchange Commission's investigation of circulation reporting by major publishers, including Dow Jones. Although the company has not been linked to any wrongdoing, the probe is likely to make investors jittery in the near term.
Dow Jones continues to tough it out in difficult times. For now, though, it looks like its results aren't likely to command headlines.
Fool contributor Brian Gorman is a freelance writer living in Chicago. He does not own shares of any companies mentioned here.
