Valassis Communications ( VCI), a provider of various marketing products and services to manufacturers, direct marketers, retailers, franchisees, and other advertisers, said Thursday that its second-quarter earnings fell 22.8% from the year ago period, hurt by lower sales. The company earned $19.7 million, or 41 cents a share, in the quarter, compared with $25.5 million, or 50 cents a share, a year ago. Analysts surveyed by Thomson First Call were expecting earnings of $19.4 million, or 40 cents a share. Second-quarter revenue fell 5.7% from a year ago to $260.6 million, in line with analysts' estimate. Valassis lowered its full year earnings guidance to $1.60 a share to $1.80 a share, excluding any impact of the pending acquisition of direct mail company ADVO. "We are working toward improved revenue results and cost control for the back half of 2006. We are excited about the prospects of our pending acquisition of ADVO and the positive impact we believe the combination will have in creating value for both customers and shareholders,'' the company said. Second-quarter operating income fell 23.1% from a year ago to $32 million, and operating margin dropped 277 basis points to 12.3%. By segment, second-quarter revenue from market delivered free-standing insert fell 12.9% from a year ago to $117 million, revenue from neighborhood targeted products fell 6.6% to $67.4 million, and revenue from household targeted products fell 15% to $14.2 million. However, revenue from market delivered run of press rose 26% to $34.4 million, and revenue from international &services segment rose 7% to $27.6 million. On July 6, the Livonia, Mich.-based company said it entered into a definitive merger agreement to acquire ADVO for about $1.3 billion, including about $125 million in existing ADVO debt which Valassis said it expects to refinance. The acquisition is expected to close between September and October. Shares of Valassis were trading up 7 cents, or 0.4%, to $20.02 Thursday.