Issue: R.H. Donnelley,
Switchboard Results a Window into YP Industry
leaders in the print and online Yellow Pages and directory space reported
second-quarter earnings last week, including directory sales agent R.H.
Donnelley and online directory provider Switchboard Inc.
R.H. Donnelley gained
results from its efforts to boost earnings through increasing efficiencies
and debt reduction. The company is also nearing the end of its stock-buyback
program, which was designed to boost its share price. Second-quarter earnings
per share were up about 27 percent over the second quarter of 2000. The
company's DonTech (a perpetual joint venture with SBC Directory Operations)
and Sprint operations showed modest sales growth during the first half
of 2001. The slowing economy is having an impact on R.H. Donnelley's operations,
in particular on the bad debt ratio in its Sprint markets, especially
Las Vegas. Improved results in the DonTech region were in large part attributed
to improved billing and collections procedures implemented by SBC.
posted a $5.8 million loss for the quarter on revenues of $4.7 million.
But the company maintains it will become cash-flow positive by the fourth
quarter. Switchboard projected it will end the year with revenues of $24
million. Furthermore, it forecast $40 million in revenues for 2002. The
company is basing its outlook on the quality and predictability of several
recent partnerships, including AOL (which will not completely roll out
until later this year), the Berry Co. and TransWestern Publishing.