Dow Jones to miss 1Q
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March 7, 2001: 11:12 a.m. ET
Declining ad sales at Wall Street Journal lead to earnings shortfall
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NEW YORK (CNNfn) - Dow Jones & Co. Wednesday became the latest publisher to warn that first-quarter earnings would miss Wall Street forecasts due to sluggish ad sales, adding it may cut jobs to lower costs.
The New York-based publisher of the Wall Street Journal and Barron's said it now expects earnings of 16 to 20 cents a share for the quarter, instead of the 56 cents a share forecast by analysts, according to earnings tracker First Call.
Dow Jones (DJ: Research, Estimates) stock sank $3.85 to $57.50 on the news, a drop of about 6 percent.
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Advertising at the Journal fell 32.1 percent, following a 42.1 percent increase a year ago. The company said it expects advertising volume to be down 25-30 percent in the first quarter.
"Based on continuing economic uncertainty and related softness in advertising, particularly in the financial and technology sectors, operating results for the balance of 2001 are difficult to project at this point," CEO Peter Kann said, adding that ad sales could modestly recover in the second half of the year.
The company also said it had established a $255 million reserve, charged against 2000 fourth-quarter earnings, to cover payments owed by Telerate, a market-data business it sold to Bridge Information Systems. Bridge has filed for Chapter 11 bankruptcy protection.
The company said it was also taking steps to cut costs, including "some reductions in personnel."
Dow Jones is the latest media company to issue a profit warning in the slowing economy.
The New York Times Co. warned Monday it also would miss first-quarter estimates because of declining ad sales. The publisher of the New York Times and the Boston Globe also said it was considering job reductions in addition to other cost-cutting measures.
And last month Knight Ridder Inc. (KRI: Research, Estimates), publisher of the Philadelphia Inquirer, San Jose Mercury News and Miami Herald, issued a similar forecast.
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