Financial news specialist Dow Jones, publisher of the Wall Street Journal, has blamed an advertising slump for a decline of more than one half in profits.

Revenues at the firm's electronic publishing operations, which include the Dow Jones newswire, fell 4.4% to $77.8m during the first three months of the year, the firm said.

And takings by print operations were, at $236m, one fifth lower than a year before "reflecting the difficult advertising environment".

The flagship Wall Street Journal title, which saw levels of advertising lineage drop by one quarter, was pulled into an $8.8m loss by a poor performance at non-US operations.

Forecasts

But chairman Peter Kann said reforms such as extra colour sections and content "enhancements" at the WSJ left the firm well placed for the future.

"Each of these actions position us to fully capitalise on an improved business environment, when it arrives," Mr Kann said.

The firm's forecasts of full year earnings equivalent to $1.45 per share showed the firm was optimistic of the outlook, said Robertson Stephens analyst Brian Shipman.

"It's pretty bullish," Mr Shipman said.

"But if the economy continues to recover, it will eventually affect their advertising as it's affected consumer-related advertising at other newspapers, television and radio."

Worst hit

While most media organisations saw advertising revenues fall amid the global economic slowdown, Dow Jones has suffered more than many of its peers because of its reliance on financial and technology advertising, two of the worst performing sectors.

"The New York Times and USA Today have the benefit of retail advertising and other consumer-type advertising, which are starting to recover," said Dresdner Kleinwort Wasserstein analyst Edward Atorino

"But The Wall Street Journal hasn't been able to penetrate those markets. That's why they've redesigned the paper."

Online growth

Dow Jones' earnings, before special items were accounted for, came in at $6.9m during the quarter, compared with $14m a year earlier.

Including profits from the sale of four newspapers in the firm's Ottoway group, earnings hit $129.8m.

The number of subscribers to the Wall Street Journal's paid-for online edition, WSJ.com, reached 640,000.