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Daily Record parent sees mixed 4Q results

The Dolan Company, parent of The Daily Record, saw mixed results in the fourth quarter, as an accounting adjustment helped drive profit up, but a continued slowdown in foreclosures led to a drop in revenue.

Minnesota-based Dolan reported net income of $10.4 million for the quarter, or 36 cents per share, an 87 percent increase from the $5.5 million, or 18 cents per share, earned in the fourth quarter of 2010.

Analysts polled by Thomson Reuters had been expecting quarterly earnings of 9 cents per share.

The company’s forecast for 2012, however, fell below analysts’ expectations. While the company expects 2012 net income per share to be between 38 and 50 cents, analysts were projecting 56 cents.

Fourth-quarter revenue decreased 5.6 percent from the corresponding period in 2010, with a larger portion of the decrease coming from the company’s business information division.

Dolan has two divisions, business information and professional services. The business information division has nearly 60 publications of mainly business and legal newspapers in 21 markets. That division saw revenue of $19.9 million, a 6.2 percent decrease from the fourth quarter in 2010.

The company’s professional services division, which provides specialized services to the legal profession through subsidiaries NDex, Counsel Press and DiscoverReady, saw revenue of $51.3 million, a 5.4 percent decrease from the corresponding quarter in 2010.

“Our fourth-quarter results were mixed,” James P. Dolan, chairman, CEO and president of The Dolan Company, said Friday on a conference call. “We continued to see softness in our default processing business and related public notice advertising. However, we are pleased with the performance of our e-discovery business.”

In July, Dolan acquired ACT Litigation Services, which helped the company grow its annual electronic discovery business revenue by more than 40 percent.

However, the year’s 20 percent revenue decline in mortgage default-related businesses continued to hurt the business information services division, which relies on revenue from public notice advertisements.

Dolan said he expects default referrals to pick up in 2012, due to the $25 billion nationwide settlement with five of the country’s largest mortgage lenders and new procedures.

“Although we do have our near-term challenges, we remain very encouraged about our future,” he said. “We’re very excited about the e-discovery business and the growth possibilities that are right in front of us.”

The company is negotiating to sell the Colorado Springs Business Journal and Mississippi Business Journal, and plans to have the deals finalized by the end of the year.

Dolan released its earnings report prior to the opening of the market Friday. Shares of Dolan’s stock rose 3 cents, or less than 1 percent, to close at $9.36 on the New York Stock Exchange.