EXHIBIT 99.2
Media Contact: Richard Tofel
(212) 416-2951
Investor Contact: Jerome Leshne
(212) 416-2687
DOW JONES & COMPANY ANNOUNCES
THAT FIRST QUARTER 2001 EARNINGS
WILL FALL SHORT OF CONSENSUS
DOW JONES ALSO FINALIZES YEAR 2000 EARNINGS,
INCLUDING RESERVE FOR LOSS CONTINGENCY
RELATED TO BRIDGE INFORMATION SYSTEMS
NEW YORK, N.Y. (March 7, 2001)- Dow Jones & Company announced today
that first quarter 2001 earnings are now expected to be in the range of
16-20 cents per diluted share, below current market expectations, on
softer than expected advertising revenues.
Advertising linage, or volume, at The Wall Street Journal fell 32.1%
on a per issue basis in February, after a 42.1% increase a year earlier.
Linage is expected to be down by a similar percentage in March, compared
with last year's 36% gain. As a consequence, Dow Jones now expects
Journal per-issue linage to decline 25-30% in the first quarter of this
year, compared with a 38.2% increase in the first quarter of 2000.
"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," said Peter R. Kann, chairman and chief executive
officer. "After coming up against the extraordinary first half of last
year, we would note that advertising comparisons will ease considerably
in the third and fourth quarters, and we expect the percentage declines
in linage to ease as well, and perhaps turn into modest gains in the
latter part of this year."
Richard F. Zannino, executive vice president and chief financial
officer, said, "We are taking aggressive actions that will even better
align our expense structure with the current operating environment,
without inhibiting future growth. These actions will include deferring
discretionary expenditures and achieving new operating efficiencies
across all of our businesses. Unfortunately, they will also include some
reductions in personnel. When these steps have been taken, however, Dow
Jones will be exceptionally well positioned for resumed growth, building
on our very strong franchises and brands."
Dow Jones also announced today that it has established a reserve of
$255 million, charged against earnings in the fourth quarter of 2000, in
connection with its guarantee of payments owed by the Telerate subsidiary
of Bridge Information Systems. While payments, if any, under the
guarantee would be made in cash, the reserve announced today does not
reflect the expenditure of cash.
With this reserve, and preliminary results and other special items
reported earlier, Dow Jones recorded a loss of $274.3 million, or $3.15
per share, in the fourth quarter of 2000, and a loss of $119 million, or
$1.35 per share, for all of 2000, compared to profits of $272.4 million,
or $2.99 per diluted share, for all of 1999. Before special items, as
previously announced, Dow Jones earned $294.6 million, or $3.32 per
diluted share, in 2000. Earnings per share before special items rose 36%
in 2000 after rising 27% in 1999.
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As previously disclosed, Dow Jones has guaranteed, under certain
circumstances, certain annual minimum payments for data that Telerate
acquires from Cantor Fitzgerald Securities and Market Data Corporation
(the "Cantor Data") under contracts entered into during the period when
Telerate was owned by Dow Jones. The minimum payments average
approximately $50 million per year through October 2006, the aggregate
net present value of which is approximately $255 million.
Bridge has filed a petition under Chapter 11 of the U.S. Bankruptcy
Code with a view to seeking a sale of its assets. While it is not
possible for Dow Jones to determine with certainty the extent to which it
may be required to make payments under the guarantee, the Company
believes that the Cantor Data has substantial value, the realization of
which would offset any liability of Dow Jones under the guarantee.
Again, however, it is not possible for Dow Jones to determine with
certainty whether or when any such offsets would be realized.
To the extent any offsets against the guarantee are realized, or if
the liability is otherwise reduced or eliminated, Dow Jones will reduce
or eliminate the reserve and recognize special gains in the relevant
periods.
Dow Jones will hold a conference call, to be webcast at
http://dj.com, at 9:00am this morning to discuss the first quarter 2001
outlook and related issues.
Dow Jones & Company (NYSE: DJ; dj.com) publishes The Wall Street
Journal and its international and online editions, Barron's and
SmartMoney magazines and other periodicals, Dow Jones Newswires, Dow
Jones Indexes, and the Ottaway group of community newspapers. Dow Jones
is co-owner with Reuters Group of Factiva, with Excite@Home of Work.com,
and with NBC of the CNBC television operations in Asia
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and Europe. Dow Jones also provides news content to CNBC and radio
stations in the U.S.
Information Relating To Forward-Looking Statements
This press release contains forward-looking statements that involve risks
and uncertainties that could cause actual results to differ materially
from those anticipated, including, business, economic and stock market
conditions that are impacting the volume of advertising, in particular
IPO, dot-com, technology and financial advertising, in the company's
products and services; and such other risk factors as may have been or
may be included from time to time in the company's reports filed with the
Securities and Exchange Commission.
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