Like Idearc Media earlier this week, R.H. Donnelley received a boost in its share price today after unveiling first-quarter results that showed market conditions are about as bad as expected, but not any worse. The company also unveiled a refinancing plan that will increase interest expense while also extending the maturing of much of its debt and gaining more flexible terms. The refinancing seems to have contributed to improved confidence in RHD’s stability.

The company also maintained a strong EBITDA margin in Q1 and announced plans to cut about US$30 million in costs, much of it in head count and other employee-related expenses.

The market seemed to like the results. As of 4 p.m. Eastern Time, RHD shares were up 28.5 percent to 8.20. Idearc shares are up almost 8 percent. Following its Q1 announcement, Idearc shares rose significantly and RHD enjoyed a bump as well. Today, the situation was reversed and RHD returned the favor, so to speak.

While it was a good day for the company’s share price, the outlook for ad sales painted by RHD CEO Dave Swanson was anything but rosy. The publisher reported total first-quarter revenues of US$674.7 million, a 2 percent increase over 2007. Ad sales, however, dropped 4.8 percent, which RHD executives pointed out was in line with 2008 guidance of mid-single-digit declines. The company confirmed its 2008 guidance on today’s call.

In describing the current environment, Swanson was very careful not to raise hopes that a recovery was on the horizon.

Responding to a question from an analyst, Swanson emphasized that he “has not seen anything that would indicate any positive turn to the North” in sales results. Asked specifically about Las Vegas, one of RHD’s key markets, Swanson described it as the worst business environment he has seen in his career. While Florida and Nevada remain the worst markets, the pain of a slowing economy is being felt across all 28 states RHD operates in, according to Swanson.

So RHD is making it clear that while the economy will keep results down for a while (and executives maintain the downturn is cyclical rather than secular), the company has taken measures, cost cutting and refinancing, that will improve the stability of the business. RHD is also working on a new version of DexKnows.com, which will go into beta later this year.

On the eve of today’s announcement, Deutsche Bank upgraded RHD from sell to hold, a boost that reflects a view that RHD is less risky as an investment than it was just a few weeks ago.