Dow Jones & Company Announces Second Quarter Earnings; Provides Third Quarter Earnings Guidance.Business Editors Dow Jones Dow Jones the best known of several U.S. indexes of movements in price on Wall Street. [Am. Hist.: Payton, 202] See : Finance & Company (NYSE NYSE See: New York Stock Exchange : DJ) announced today that, before the special items noted below, it earned 25 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. for the second quarter ended June June: see month. 30, 2002, a decline of 51.9% compared to the 52 cents per share earned in the comparable quarter of 2001. The Company's reported earnings per share for the quarter were 64 cents per share, up 28% over the 50 cents per share reported in the second quarter of 2001. Revenue of $417.0 million declined 13.9% in the second quarter 2002 compared to the second quarter of 2001. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , before special items, of $382 million declined 7.1% from last year. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , before special items, of $35.1 million declined 51.9% from the second quarter of 2001. Special items in the second quarter of 2002 netted to a gain of $32.6 million, or 39 cents per share, and included gains from the sale of the Company's Essex County Essex County can refer to:
The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. for workforce reductions and the amortization of discount on a reserve for contingent guarantee Contingent Guarantee A guarantee of payment that is dependent on one or more future events. Notes: Here's an example of a contingent guarantee: say a bank writes a guarantee of payment on behalf of one of its customers, who in turn uses the guarantee to secure a obligations. Special items in the second quarter of 2001 netted to a loss of $2.3 million, or $0.03 per share. Please refer to the attached financial exhibits and notes for more details on the Company's results and special items. Dow Jones also said that it currently expects linage lin·age also line·age n. 1. The number of lines of printed or written material. 2. Payment for written work at a specified amount per line. linage Noun 1. trends to modestly improve at The Wall Street Journal in the third quarter of 2002, with linage currently estimated to be down 8% to 12%. Consequently, the Company currently expects earnings per share before special items in the third quarter 2002 to be in the upper single digits range, compared to $0.20 per share in the third quarter 2001. Peter R. Kann, chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Dow Jones & Company, said: "We continue to profitably navigate (1) "Surfing the Web." To move from page to page on the Web. (2) To move through the menu structure in a software application. our way in the most difficult global advertising environment witnessed in my three decades in this business; especially in our dominant financial and technology advertising segments. We continued to take aggressive action during the second quarter as we realigned our management structure to improve execution, further reduced our spending, and continued to post strong results from the vigorous implementation of our long-range long-range adj. 1. Of, suitable for, or reaching long distances: long-range missiles. 2. Requiring or involving an extended span of time: long-range planning. plan initiatives. We also continued to improve profitability at our community newspapers and electronic publishing An umbrella term for non-paper publishing, which includes publishing online or on media such as CDs and DVDs. segments. All of this positions us for strong earnings growth once the global advertising environment improves." Segment Results Print publishing revenues declined 16.5% in the second quarter to $261.3 million, reflecting the extraordinarily difficult global advertising environment. Advertising linage at The Wall Street Journal fell 20.8% on a per-issue basis (down 18.5% in the month of June). Operating income in the print publishing segment, excluding special items, was $5.2 million in the second quarter, compared to $43.3 million last year. Operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: in the second quarter declined to 2.0% this year from 13.8% last year. Electronic publishing revenues decreased 2.1% in the second quarter to $78.6 million. Paid subscribers to The Wall Street Journal Online, the largest paid subscription news site on the web, continued to grow, reaching 646,000 as of June 30, 2002. Electronic publishing operating income, excluding special items, was $15.2 million in the second quarter, up 6.5% from a year earlier. Operating margins in the second quarter improved to 19.3% this year from 17.7% last year. Ottaway community newspapers Ottaway Community Newspapers (formerly Ottaway Newspapers, Inc.) is a subsidiary of Dow Jones and owns newspapers in California, Maine, Massachusetts, New Hampshire, New York, Oregon and Pennsylvania. It is headquartered in Campbell Hall, New York. revenue increased 1.0% in the second quarter to $71.9 million and advertising linage fell by 2.2% (4.1% in the month of June), excluding divested properties. Ottaway operating income, excluding special items and divested properties, was $21.9 million in the second quarter, up 6.6% from a year ago and operating margins improved to 30.4% this year from 28.8% last year. During the second quarter, the Company repurchased 273,000 shares of its common stock at an aggregate price of $15.2 million. The Company ended the second quarter 2002 with $39 million in debt, compared to $200 million at the end of the second quarter 2001. As previously announced, the Company will host an earnings conference call at 10:00 a.m. Eastern daylight For other uses, see Daylight (disambiguation). Daylight or the light of day is the combination of all direct and indirect sunlight outdoors during the daytime (and perhaps twilight). time today. The call can be accessed via a live webcast through the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the Company's Web site, www.dowjones.com, or listen-only dial-in conference lines, by dialing 706-643-1846. A replay of the conference call and the full text of the prepared remarks will be available on the Company's Web site in the Investor Relations section shortly after the call concludes. Dow Jones & Company (NYSE: DJ; dowjones.com) publishes The Wall Street Journal and its international and online editions, Barron's and the Far Eastern Economic Review, Dow Jones Newswires Dow Jones Newswires is the real-time financial news organization owned by Dow Jones. Founded in 1882, its primary competitors are Bloomberg L.P. and Reuters. The company reports more than 420,000 subscribers -- including brokers, traders, analysts and fund managers -- as of July , Dow Jones Indexes and the Ottaway group of community newspapers. Dow Jones is co-owner with Reuters Reuters British cooperative news agency. Founded in 1851 by Paul Julius Reuter, it was initially concerned with commercial news but began to serve a growing newspaper clientele after the London Morning Advertiser subscribed in 1858. Group of Factiva Factiva is a division of Dow Jones & Company. The unit provides business and research information and services for the business and education communities. Factiva products provide access to more than 10,000 sources (such as newspapers, journals, magazines, news and radio , with Hearst of SmartMoney SmartMoney The Wall Street Journal Magazine of Personal Business was launched in 1992 by Hearst Corporation and Dow Jones & Company. Its first editor was Norman Pearlstine. It is published monthly and its current circulation is 824,327. and with NBC NBC in full National Broadcasting Co. Major U.S. commercial broadcasting company. It was formed in 1926 by RCA Corp., General Electric Co. (GE), and Westinghouse and was the first U.S. company to operate a broadcast network. of CNBC CNBC Center for the Neural Basis of Cognition (artificial intelligence) CNBC Consumer News and Business Channel CNBC Congress of National Black Churches, Inc. television operations in Asia and Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). . Dow Jones
also provides news content to CNBC and radio stations in the U.S.Information Relating To relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : This press release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those anticipated, including the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. nature of the company's business and the strong negative impact of economic downturns on advertising revenues; the severe weaknesses in the current technology and financial advertising markets; the extent of any recovery in the economy; the risk that the company will not be able to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. improvements in the economy; and such other risk factors as may be included from time to time in the company's reports filed with the Securities and Exchange Commission.
Dow Jones & Company
Earnings Summary
Quarters Ended Six Months Ended
(in thousands, except June 30 June 30
per share amounts) 2002 2001 2002 2001
---- ---- ---- ----
Reported results:
Revenues $417,024 $484,126 $809,915 $943,994
Operating income 23,957 55,759 36,263 71,415
Net income 54,000 43,244 183,825 49,423
Effective tax rate (a) 23.2% 35.3% 20.8% 35.1%
Diluted EPS $.64 $.50 $2.17 $.57
Excluding special items described in Notes 2 to 5:
Operating income $ 35,055 $ 72,926 $ 47,361 $103,467
Net income 21,402 45,495 28,286 60,202
Effective tax rate (a) 40.0% 40.0% 40.0% 40.0%
Diluted EPS $.25 $.52 $.33 $.69
EPS percentage change (51.9)% (50.9)% (52.2)% (64.2)%
(a) The effective tax rate is net of minority interests.
Dow Jones & Company
Condensed Consolidated Statements of Income
Quarters Ended Six Months Ended
(in thousands, except June 30 June 30
per share amounts) 2002 2001 2002 2001
---- ---- ---- ----
Revenues:
Advertising $245,001 $300,903 $464,869 $577,092
Information services 70,725 72,601 142,356 145,778
Circulation and other 101,298 110,622 202,690 221,124
-------- -------- -------- --------
Total revenues 417,024 484,126 809,915 943,994
Expenses:
News, operations and
development 124,658 133,612 251,690 271,748
Selling, administrative and
general 153,752 156,870 305,878 327,015
Newsprint 26,638 44,094 53,416 87,208
Print delivery costs 47,891 50,023 95,143 99,342
Depreciation and
amortization 29,030 26,601 56,427 55,214
Restructuring 11,098 17,167 11,098 32,052
-------- -------- -------- --------
Operating expenses 393,067 428,367 773,652 872,579
Operating income 23,957 55,759 36,263 71,415
Other income (deductions):
Investment income 106 499 196 1,053
Interest expense (492) (70) (2,081) (139)
Equity in earnings (losses) of
associated companies 3,107 720 657 (10,057)
Gain on sale of businesses 44,518 197,925
Contract guarantee, net (3,041) 8,129 (6,219) 10,285
Other, net (305) 538 450 833
-------- -------- -------- --------
Income before income taxes and
minority interests 67,850 65,575 227,191 73,390
Income taxes 16,315 23,544 48,193 26,715
-------- -------- -------- --------
Income before minority
interests 51,535 42,031 178,998 46,675
Minority interests 2,465 1,213 4,827 2,748
-------- -------- -------- --------
Net income $ 54,000 $ 43,244 $183,825 $ 49,423
Net income per share:
- Basic $.64 $.50 $2.18 $.57
- Diluted .64 .50 2.17 .57
Weighted-average shares outstanding:
- Basic 84,061 86,147 84,189 86,458
- Diluted 84,550 86,741 84,698 87,078
Dow Jones & Company
Segment Information
Quarters Ended Six Months Ended
June 30 June 30
(in thousands) 2002 2001 2002 2001
---- ---- ---- ----
Revenues:
Print publishing $261,257 $312,846 $497,305 $611,419
Electronic publishing 78,613 80,262 156,413 161,660
Community newspapers:
Continuing operations 71,916 71,210 133,410 132,614
Divested operations 5,238 19,808 22,787 38,301
Consolidated revenues $417,024 $484,126 $809,915 $943,994
Percentage change in revenues
excluding divested
operations (11.3)% (19.0)% (13.1)% (18.1)%
Operating income:
Print publishing $ (3,143) $ 34,949 $(11,920) $ 46,803
Electronic publishing 12,721 7,098 27,948 9,982
Community newspapers:
Continuing operations 21,880 20,526 34,648 31,316
Divested operations 1,348 4,813 4,643 8,221
Corporate (8,849) (11,627) (19,056) (24,907)
Consolidated operating
income $ 23,957 $ 55,759 $ 36,263 $ 71,415
Depreciation and amortization
(D&A):
Print publishing $ 19,224 $ 17,595 $ 36,240 $ 35,155
Electronic publishing 6,696 4,574 13,431 11,180
Community newspapers:
Continuing operations 2,783 3,184 5,596 6,387
Divested operations 88 960 681 1,920
Corporate 239 288 479 572
Consolidated D&A $ 29,030 $ 26,601 $ 56,427 $ 55,214
Excluding Restructuring Charges:
--------------------------------
Operating income:
Print publishing $ 5,167 $ 43,261 $ (3,610) $ 63,682
Electronic publishing 15,164 14,233 30,391 22,066
Community newspapers:
Continuing operations 21,880 20,526 34,648 31,637
Divested operations 1,348 4,813 4,643 8,221
Corporate (8,504) (9,907) (18,711) (22,139)
Consolidated operating
income $ 35,055 $ 72,926 $ 47,361 $103,467
Operating margin:
Print publishing 2.0% 13.8% (0.7)% 10.4%
Electronic publishing 19.3 17.7 19.4 13.6
Community newspapers
Continuing operations 30.4 28.8 26.0 23.9
Divested operations 25.7 24.3 20.4 21.5
Consolidated operating
margin 8.4 15.1 5.8 11.0
Dow Jones & Company
Supplemental Segment Revenue Information
Quarters Ended Six Months Ended
June 30 June 30
(in thousands) 2002 2001 2002 2001
---- ---- ---- ----
Print Publishing:
U.S. Publications:
Advertising $167,552 $206,986 $315,718 $402,567
Circulation and other 68,597 70,886 135,689 143,757
International Publications:
Advertising 15,736 22,984 27,447 42,617
Circulation and other 9,372 11,990 18,451 22,478
-------- -------- -------- --------
Total 261,257 312,846 497,305 611,419
Electronic Publishing:
Dow Jones Newswires:
Domestic 44,838 48,885 90,647 97,997
International 11,060 10,536 23,035 21,016
-------- -------- ------- --------
Total Newswires 55,898 59,421 113,682 119,013
Consumer Electronic
Publishing (b) 12,843 12,108 24,311 24,792
Dow Jones Indexes/Ventures 9,872 8,733 18,420 17,855
-------- -------- -------- --------
Total 78,613 80,262 156,413 161,660
Community Newspapers:
Advertising
Continuing operations 52,149 51,717 95,492 94,869
Divested operations 3,691 13,871 15,707 26,403
-------- -------- -------- --------
Total advertising 55,840 65,588 111,199 121,272
Circulation and other
Continuing operations 19,767 19,493 37,918 37,745
Divested operations 1,547 5,937 7,080 11,898
-------- -------- -------- --------
Total circulation and
other 21,314 25,430 44,998 49,643
-------- -------- -------- --------
Total 77,154 91,018 156,197 170,915
Total segment revenues $417,024 $484,126 $809,915 $943,994
(b) Includes WSJ.com and related vertical sites and licensing/business
development.
Dow Jones & Company
Statistical Information
Quarters Ended Six Months Ended
June 30 June 30
2002 2001 2002 2001
---- ---- ---- ----
Advertising Volume (linage)
Year-Over-Year Percentage Change:
The Wall Street Journal
General (17.6)% (40.5)% (21.5)% (38.2)%
Financial (37.9) (38.6) (35.5) (35.8)
Classified (7.2) (18.2) (12.2) (15.1)
Total (20.8) (37.4) (23.5) (34.8)
The Asian Wall Street
Journal (31.2) (16.1) (35.3) (11.2)
The Wall Street Journal
Europe (27.9) (28.9) (33.4) (20.7)
Barron's (14.7) (33.5) (19.1) (30.1)
Ottaway Newspapers (c)
Daily (1.9) (2.4) (1.6) (3.2)
Non-daily (4.2) 7.9 (1.8) 5.7
Total (2.2) (0.9) (1.6) (1.9)
Wall Street Journal advertising as a
percentage of total Journal linage:
General:
Technology 16.3% 18.2% 16.3% 19.4%
Other 46.8 42.5 44.6 39.9
Total 63.1 60.7 60.9 59.3
Financial 18.6 23.7 20.8 24.8
Classified 18.3 15.6 18.3 15.9
Other statistics: June 30 June 30
2002 2001
---- ----
Dow Jones Newswires terminals 339,000 333,000
WSJ.com subscribers 646,000 591,000
WSJ.com unique visitors/business day 114,777 103,877
Average monthly unique visitors to the Journal
Network (d) 3,486,000 n/a
Average monthly page views to the Journal
Network (d) 48,906,000 n/a
(c) Percentage excludes divested operations
(d) In conjunction with the relaunch of WSJ.com, monthly page
views and unique visitors statistics are calculated under a
new methodology, prior year figures are not available on a
comparable basis. The Journal Network includes WSJ.com and its
vertical sites.
Dow Jones & Company Notes to Financial Information 1. The company's calculation of net earnings and earnings per share excluding special items may not be comparable to similarly titled measures reported by other companies, since companies and investors may differ as to what type of events constitute special items and warrant adjustments. Net earnings and earnings per share excluding special items are not measures of performance under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting and should not be construed as substitutes for consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: net income and earnings per share as a measure of performance. However, management uses these measures in comparing the company's historical performance and believes that they provide meaningful and comparable information to investors to aid in their analysis of the company's performance relative to prior periods and to its competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. . 2. The second quarter of 2002 included a gain of $44.5 million ($38 million after taxes, or $.45 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share) from the sale of Ottaway's Essex County newspaper properties to Eagle-Tribune Publishing Company. The first quarter of 2002 included a gain of $153.4 million ($126.1 million after taxes, or $1.49 per diluted share) resulting from the sale of four of the company's Ottaway newspapers to Community Newspapers Holdings, Inc. 3. The second quarter of 2002 included restructuring charges of $11.1 million ($6.3 million after taxes, or $.07 per diluted share) largely reflecting employee severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when related to a workforce reduction. The second quarter of 2001 included restructuring charges of $17.2 million ($10.4 million after taxes, or $.12 per diluted share) for employee severance and for a technology asset write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. related to WSJ WSJ Wall Street Journal WSJ Wisconsin State Journal (Madison, WI) WSJ Web Services Journal WSJ Winston-Salem Journal (North Carolina) WSJ Wagle Street Journal (Kathmandu, Nepal blog) .com. The first quarter of 2001 included restructuring charges of $14.9 million ($9.1 million after taxes, or $.10 per diluted share) for employee severance related to a workforce reduction and for asset write-downs associated with online businesses. 4. The second quarter of 2002 included a charge of $3 million, or $.04 per diluted share, relating to the amortization of the discount on a contract guarantee. The first quarter of 2002 included a charge of $3.2 million, or $.04 per diluted share, relating to this matter. In 2000, the company established a reserve for the present value of the total estimated payments through October October: see month. 2006 in connection with Dow (Direct OverWrite) See magneto-optic disk. Jones' guarantee of certain minimum payments for data acquired by Dow Jones' former Telerate subsidiary from Cantor Fitzgerald Cantor Fitzgerald L.P. is a global financial services firm specializing in bond trading, as well as investment banking, asset management, market data and brokerage services. Securities and Market Data Corporation (MDC (1) (Mobile Daughter Card) See riser card. (2) See Meta Data Coalition. ). Bridge Information Systems, Inc., which purchased Telerate in 1998, is currently in bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most but made payments for this data for the post-petition periods through October 2001, when Telerate ceased operations, went out of business, sold certain assets and rejected re·ject tr.v. re·ject·ed, re·ject·ing, re·jects 1. To refuse to accept, submit to, believe, or make use of. 2. To refuse to consider or grant; deny. 3. its contracts with Cantor and MDC. The company is now in litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. with Cantor and MDC with respect to their claims for amounts due under the contract guarantee. The company has various substantial defenses to these claims and the litigation is proceeding. The second quarter of 2001 included a net gain of $8.1 million, or $.09 per diluted share and the first quarter of 2001 included a net gain of $2.2 million, or $.02 per diluted share, reflecting payments made by Bridge net of amortization of the discount. 5. In the second quarter of 2002, equity in earnings of associated companies associated company associate n → Partnerfirma f associated company n → società collegata included special gains at CNBC Asia CNBC Asia is a business news channel in Asia. A subsidiary of NBC Universal, it is the Asian service of Consumer News and Business Channel (CNBC). It is broadcast from Singapore and Hong Kong. History CNBC Asia launched in 1995. of $3.9 million ($.05 per diluted share). The first quarter of 2001 included a $2.4 million ($1.6 million after taxes, or $.02 per diluted share) charge to equity in losses of associated companies for costs related to the shut-down of Work.com, a joint venture with Excite@Home. 6. The company's business and financial news and information operations Actions taken to affect adversary information and information systems while defending one's own information and information systems. Also called IO. See also defensive information operations; information; offensive information operations; operation. are reported in two segments: print publishing and electronic publishing. The results of the company's Ottaway Newspapers subsidiary, which publishes 13 daily newspapers and 13 weekly newspapers in 9 states in the U.S., are reported in the community newspaper segment. Print publishing includes the operations of The Wall Street Journal and its international editions, Barron's and other periodicals, as well as U.S. television operations (results of the company's international television ventures are included in equity in earnings (losses) of associated companies). Electronic publishing includes the operations of Dow Jones Newswires, Consumer Electronic Publishing and Dow Jones Indexes/Ventures. 7. Restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and other special charges included in segment operating income were as follows:
(in thousands) Quarters Ended June 30 Six Months Ended June 30
2002 2001 2002 2001
---- ---- ---- ----
Print publishing $ 8,310 $ 8,312 $ 8,310 $16,879
Electronic publishing 2,443 7,135 2,443 12,084
Community newspapers 321
Corporate 345 1,720 345 2,768
------- ------- ------- -------
$11,098 $17,167 $11,098 $32,052
8. Summarized financial information for 50% held equity-basis
investments in associated companies were as follows (amounts are at
100% levels):
(in thousands) Quarters Ended June 30 Six Months Ended June 30
2002 2001 2002 2001
---- ---- ---- ----
Factiva
Revenues $61,720 $65,485 $125,146 $129,655
Operating income 2,786 3,408 7,437 6,191
Depreciation and
amortization 3,368 2,570 7,216 4,831
SmartMoney
Revenues $12,099 $13,791 $ 23,072 $ 26,311
Operating loss (2,341) (6,740) (4,789) (11,689)
Depreciation and
amortization 446 516 954 1,005
CNBC International (e)
Revenues $10,536 $13,298 $ 17,743 $ 24,114
Operating loss (4,861) (4,654) (13,588) (15,643)
Depreciation and
amortization 1,071 1,153 2,125 2,366
(e) Includes the results of CNBC Europe CNBC Europe is a business and financial news channel broadcast in Europe. It is the European version of CNBC. It is operated by NBC Universal, and headquartered in London. and CNBC Asia. |
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