Harte-Hanks' Shoppers business continues to fall

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Harte-Hanks Inc. said its operating revenue for the three months ended June 30 totaled $274.8 million, down 5.3%.

Second quarter diluted earnings per share were 29 cents, compared to diluted earnings per share of 31 cents in Q2 2007.

Direct marketing revenue grew 4.4% during the second quarter. The tech/telecom and select verticals delivered double-digit revenue growth during the same period while the retail and financial segments were flat. The pharma/healthcare vertical posted a double-digit revenue decline.

The Shoppers negative year-over-year performance trend continued, with revenue down 20% and operating income down 42.4% from the second quarter of 2007. However, compared to the first quarter of 2008, revenue was up 3.5% and operating income was up 52.2%, driven by both the revenue increase and cost reduction measures.

Harte-Hanks said Shoppers continues to face a difficult environment in California and Florida that doesn't appear to be improving. In addition, while direct marketing has delivered top line growth over the past four quarters, more customers across all verticals are becoming cautious with their spending plans in the face of economic uncertainty. As a result, Harte-Hanks is looking to improve its efficiency and effectiveness in delivering its products and services to customers, it said.

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