Idearc Revenues: 4th Quarter 2008 to come soon…





For the 3rd Quarter operating revenue was 659 for print, 75 for internet, and1 for other with a total of 735 for the Quarter.  Net income was 73 for the 3rd Quarter. EBITDA margin was 40.5% for the quarter…..


I believe in a few weeks the 4th Quarter earnings for Idearc Media will be out. I am curious what the change will reflect and if the continued decline of the stock will have an upturn. If not, the company needs to consider changing the business plan. It would seem that without a serious change the company’s goal is to hold on to the cliff and support the top line employees of the business, since the shareholders are not prospering.

I assume options for the company without a change to the business model would be to shut down offices and have sales consultants work from home or small satellite locations. Another option is to decrease incentive pay for sales employees or increase quotas for sales representatives in non-union areas. Although my opinion is that union organization hurts the long term success of the companies, it provides relief to the sales organization in the form of earnings from quota increases.  Last but not least, another form of relief to provide an somewhat stronger anchor to the company’s earnings is to cease paying for the tremendous amount of debt that it was given by Verizon. That would mean that the company would need to declare bankruptcy of some sort. In my opinion it would be a significantly stronger balance sheet post bankruptcy, but since the company offers advertising solutions that are now even more comparable to the companies competitors, they would be giving a new angle of spin to competitors to assault the ethical and irresponsible connotation that bankruptcy reflects in the eyes of clients who are struggling to avoid bankruptcy today. This is a huge opportunity for competitors to capitalize on the negative spin and prevent Idearc from securing new clients. 

All in all, my opinion is that the company needs to reconsider the business model and find a new path to being the greatest media company in the US!


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