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Thursday, July 13, 2006

Journal Register Registers Weaker Ad Sales

By William Trent, CFA of Stock Market Beat

We don’t want to draw too many conclusions from the results of a small-cap newspaper publisher, but Watch List company Journal Register’s (JRC) earnings announcement is one more bit of information telling us the consumer may be slowing down. As we noted with Valassis’ earnings miss not long ago, the real question is how much old media is losing share to new media versus just facing the downturn in ad sales sooner.

AP Wire 07/13/2006 Weak ad market in Midwest drags down profits for Journal Register
Profits for newspaper publisher Journal Register Co., were down for the quarter ended June 25, largely because of weak advertising revenues in Michigan and Ohio. The company announced profits Thursday of $9.8 million or 25 cents per share, including a one-time charge of $2.5 million.

With the one-time charge excluded, net income was $12.3 million, or 31 cents per share, down 20 percent from $15.2 million or 37 cents per share for the Trenton-based company for the same period in 2005. The company’s performance slightly beat the expectations of analysts surveyed by Thomson Financial, who expected earnings of 30 cents per share.

The fact that the worst of the slowdown is in Big Three Auto territory is telling but not surprising.

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