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IN BRIEF / PUBLISHING

Reader's Digest Cuts 4th-Quarter Forecast

July 26, 2001|Reuters

Reader's Digest Assn. Inc. said its fourth-quarter earnings would be sharply lower than expected amid the economic and advertising downturn and announced plans to restructure its U.S. books and entertainment division.

The sharply lowered forecast surprised analysts and rattled investors, driving the company's shares down 75 cents to close at $21.50 on the NYSE.

The Pleasantville, N.Y.-based company said it now expects earnings for its fiscal fourth quarter ended June 30 of 5 cents a share, excluding items, down from its previous estimate of 18 cents to 21 cents.

It also said it will take a fourth-quarter charge of $60 million, or 27 cents a share, as a result of the book and entertainment unit restructuring and severance costs amid companywide restructuring. No additional details on job cuts were immediately available.

Reader's Digest also said it expects first-quarter earnings to be "significantly lower" than a year ago.

Analysts on average were expecting fourth-quarter earnings of 19 cents, according to First Call/Thomson Financial. For the fiscal first quarter, analysts had been expecting earnings of 26 cents.

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