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Dow Jones second-quarter earnings fall

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New York—Dow Jones & Co. reported Thursday that it earned revenue of $454.2 million in the second quarter of 2005, an increase of 3.7% over the second quarter of 2004. For the same period, the company’s operating income declined 30.9% to $38.9 million. Excluding special items, operating income declined 10.7% compared with the second quarter 2004, mainly due to profit declines in the company’s print publishing segment.

Special items in the second quarter included a charge of 44 cents per diluted share related to the transfer of its equity interest in CNBC International and CNBC World to CNBC. According to Dow Jones, the move will boost profitability by eliminating about $15 million in annual equity losses. There will be no change to Dow Jones’ licensing agreement with CNBC in the U.S.

Dow Jones’ print publishing revenue of $235.5 million in the second quarter declined 7.2%, and operating income of $7.2 million was down 58.2% versus the same period a year ago due to a decline in advertising revenue. Advertising linage at the U.S. Wall Street Journal decreased 6.3% in the quarter, while Barron’s advertising pages decreased 8.3%.

Electronic publishing revenue of $128.4 million in the second quarter of 2005 represented an increase of 33.5% from the same period a year ago, an increase that was driven by the acquisition of MarketWatch. Operating income of $29.4 million in the second quarter increased 28.1% over last year. Paid subscribers to The Wall Street Journal Online grew to 744,000 as of June 30, up 8.8% from the prior-year period.

"Our results continue to be adversely affected by declines in b-to-b advertising in our print publishing segment, a situation we see improving in the third quarter 2005," said Peter R. Kann, Dow Jones’ chairman-CEO, in a statement.

—Sean Callahan

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