Idearc Falls to Record Low After Drop in Earnings
Idearc Inc., the publisher of Yellow Pages telephone directories, fell to a record low in New York trading after reporting a drop in fourth-quarter profit. Rival R.H. Donnelley Corp. dropped to its lowest since December 2000.
Net income fell to $100 million, or 68 cents a share, from $107 million, or 73 cents, a year earlier, Dallas-based Idearc said today in a statement. Sales declined 1.7 percent to $787 million, compared with the $790.8 million average of five analysts' estimates compiled by Bloomberg.
``The numbers were disappointing,'' said Jeffrey Shelton, an analyst for Natixis Bleichroeder in New York who recommends buying the shares and doesn't own any.
Idearc's push into the Internet failed to make up for a declining ad sales for its phone books. Revenue from the print products fell 3.5 percent to $711 million as advertisers reduced spending amid a slowing economy. Online sales, which account for less than 10 percent of the total, gained 19 percent.
``We're feeling the economic slowdown in certain markets like Florida, California and Texas,'' Interim Chief Financial Officer Samuel D. Jones said in an interview today. ``It's going to be a little while before the dot-com exceeds the print'' in advertising.
Idearc slumped $3.66, or 24 percent, to $11.56 at 4:01 p.m. in New York Stock Exchange composite trading, the biggest decline since the company's first day of trading in November 2006, after being spun off from Verizon Communications Inc.
R.H. Donnelley Corp., which releases its earnings on Feb. 28, dropped $5.42, or 20 percent, to $21.95, its biggest decline since at least 1980.
Idearc acquired Switchboard.com in December for $225 million to bring in more online traffic and give customers more outlets to purchase Internet ads. The acquisition increased traffic to Idearc's sites by 20 percent, Jones said.
Online sales rose to $75 million from $63 million in the quarter. Total revenue fell from $801 million a year ago.
Jones replaced Andy Coticchio, who left the company in November, while the company looks for a new finance chief.
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