A 57% increase in third-quarter earnings to $0.16 million, or $0.19 per share, does sound good. However, that figure includes a sizeable tax gain of $7.9 million. Excluding the tax benefit, earnings fell 8.3% to $0.11 per share. Revenues increased 3.9% to $412.4 million.
The results beat the consensus estimate, which anticipated $0.10 per share, although they fell short on the top line, since analysts were looking for sales of $442.8 million. And of course, bear in mind that last month Dow Jones warned about its third quarter, thanks to a tough advertising environment in September.
Indeed, ad revenue for The Wall Street Journal inched up only 0.3%, and ad volume was at 1.1%. Barron's fared better, with ad revenue up 22.8%.
Dow Jones has been working on strategy, and now is no different. It said that it will purchase the remaining interest in information database Factiva from Reuters
Sluggish sales are nothing new for this struggling industry, where many rival companies like New York Times
As I've said before, Dow Jones is one of my favorite names in newspapers, mainly because of its focus on business news and information, its national profile, and its merging of online and offline properties. On the other hand, its stock is also among the most expensive -- a P/E of 20 is higher than most of its industry peers (excepting Tribune, which trades for a higher P/E) and certainly reflects its leadership qualities, but it also leaves plenty of room for disappointment. I still say investors should wait for a better bargain before considering Dow Jones.
For more news on newspapers, see the following recent Foolish articles:
- Why are newspapers being pressed downward?
- Dow Jones had a downer last month.
- Dow Jones scoops for strategy.
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