• by Paul Gough , March 15, 2004

General advertising linage fell sharply at The Wall Street Journal, leading overall ad linage at the national newspaper to fall 1.7 percent in February. Double-digit gains in financial and technology advertising in the month weren't enough to turn linage into positive territory.

Journal parent Dow Jones & Co. Friday said it would meet earnings targets for the first quarter although it lowered its estimates of gains in advertising revenue with about two weeks left in the quarter. Dow Jones is sticking with its earlier prediction of earnings per share in the mid- to upper-teens. Analysts polled by Thomson/First Call expect 20 cents a share in the quarter ended March 31. Dow Jones earned 12 cents a share in the first quarter of 2003.

But the disappointing revenues at The Journal led Dow Jones to retreat slightly on its first quarter forecast of mid to high single digit growth in ad revenues. It now expects ad revenues to grow in the mid single digits compared to the first quarter of 2003. Ad linage at The Journal fell about 25 percent in February due to a drop in automotive and professional service categories. Linage for financial services rose 47 percent and technology grew 15 percent as financial services and computer manufacturers returned to The Journal, compared with February 2003.

Most other Dow Jones properties saw higher advertising linage in February, including a 2.1 percent rise at Barron's, a 4.2 percent increase at The Wall Street Journal Europe and 5.3 percent growth in the Ottaway community newspaper group. The Asian Wall Street Journal's linage dropped 6.7 percent. Ottaway's growth was tied to rises in national advertising and automotive and real estate classifieds. There was also one additional Sunday in February than there had been a year ago.

The final third of the first quarter should turn out pretty well, due to comparisons to March 2003 when the ad market was gripped by the war in Iraq.

"We expect ad linage to swing strongly upward, with gains at The Journal in the upper teens, driven by two extra publishing days an easier comparisons to last March's war-depressed levels, stated Rich Zannino, chief operating officer at Dow Jones.

In a report filed following Dow Jones' release, Merrill Lynch analyst Lauren Rich Fine said results were a little lighter than she had expected.