R.H. Donnelley Profit Climbs 44% on Debt Reduction, Cost Cuts
R.H. Donnelley Corp., the publisher of Yellow Pages telephone directories, said profit grew 44 percent after it cut costs and reduced debt.
Net income rose to $26.1 million, or 38 cents a share, from $18.1 million, or 25 cents, a year earlier, the Cary, North Carolina-based company said in a PR Newswire statement today. Revenue dropped 3.5 percent to $648 million, compared with the average estimate of $646 million in a Bloomberg survey of analysts.
R.H. Donnelley had posted losses in the three previous quarters as small businesses moved their print ads to the Internet or cut back on promotional spending amid the economic slowdown. The company said it expects ad revenue to fall 8 percent this year, compared with a previous forecast of a 7 percent to 8 percent drop.
``The decline in third-quarter ad sales was as expected due to weak consumer sentiment and the impact it is having on advertisers' ability to make new growth investments, pay existing bills and, for some, stay in business,'' Chief Executive Officer David Swanson said in the statement.
As sales dwindle, the company has tried to reduce financing costs. Interest expenses shrank to $198.1 million in the third quarter from $201.1 million in the year-earlier period.
R.H. Donnelley said it expected to cut net debt to $9.5 billion by the end of the year, from $9.8 billion as of June 30. This month, it won approval to buy back up to $400 million in bank loans at prices below par, Standard & Poor's reported yesterday.
(R.H. Donnelley plans a conference call at 10 a.m. New York time. Dial 1-888-387-9606 and cite pass code `RHD,' or listen to the Webcast on http://www.rhd.com/.)
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