It was only August when Belo Corp. (NYSE:BLC) admitted that a circulation scandal had struck The Dallas Morning News, its flagship newspaper property. At the time, the firm was only the latest among the so-called beacons of journalistic integrity to reveal it had conjured up a few subscribers to boost its numbers. (Similar revelations have been made at Tribune's (NYSE:TRB) Newsday and Spanish-language paper Hoy and Hollinger's (NYSE:HLR) Chicago Sun-Times.)

You'd have had plenty of company had you thought Belo would be forced to send a few thousand refund checks to its advertisers. It also seemed as though the firm would have a tough time making earnings estimates for 2004. But, amazingly, it appears as though the Midwestern media maven will indeed meet the Street's expectations of $0.43 to $0.44 in per-share net income for the fourth quarter.

Not surprisingly, investors were happy with the news, and bid up the shares just under 1% yesterday. But the enthusiasm may be a little too much, too soon. I mean, really, it's not like the company is doing well or anything. It just isn't doing as badly as management expected. Indeed, in a statement the company attributed its better-than-expected performance to spending $1 million less than anticipated in reimbursing Dallas Morning News advertisers and to yielding an additional $1 million in dissolving a joint venture with Time Warner's (NYSE:TWX) cable TV unit.

Still, even with that good news there's no reason to get anywhere near this stock. After all, the company can't provide guidance for 2005 because it has to deal with advertiser issues and sliding circulation at The Dallas Morning News. That creates an open situation that sounds way too close to the Vioxx scandal plaguing Merck (NYSE:MRK) for my comfort. Or to the sticky situation at KrispyKreme (NYSE:KKD), another high-profile meltdown of a company that also doesn't appear to have a clue about next year -- or, at least, not enough information to give the rest of us a clue.

This is one newspaper you ought to pitch into the recycle bin for now.

For related Foolishness:

  • Ironically, Belo's bad news came awfully close to the 30th anniversary of the resignation of President Richard Nixon due to sterling reporting by Bob Woodward and Carl Bernstein of The Washington Post (NYSE:WPO).
  • The circulation scandal forced Tribune to double down in September.
  • The New York Times (NYSE:NYT) is having its troubles, too.

Fool contributor Tim Beyers spent some time as a sports reporter many years ago. He'd rather be a fan, thanks. Tim owns none of the stocks mentioned here. You can get a peek at his portfolio and Fool profile here.