Washington Post Co. first-quarter earnings double; ad revenue continues slide
By Steven Mufson,
The Washington Post Co.’s first-quarter earnings doubled from a year earlier, but profits excluding one-time items fell.
The company’s broadcast division did well, and its cable division held steady, but the once-lucrative Kaplan education unit lost money, the flagship Washington Post newspaper’s weekday circulation plunged to less than half a million, and ad revenue continued to slide both in print and online publications.
Overall, the company on Friday announced net income of $31 million, or $4.07 a share, compared with $15.2 million, or $1.87 a share, in the first quarter of 2011. Revenue was $972.5 million in the first quarter, down 7 percent from $1.04 billion.
The figures include several one-time charges, and the company said earnings from continuing operations were $10.8 million for the first quarter, compared to $17.9 million a year earlier.
Because of continuing share buybacks, the number of outstanding shares fell 6 percent.
The newspaper division reported an operating loss of $22.6 million, compared with a loss of $12.8 million in the first quarter of 2011. Print advertising at the flagship newspaper plunged 17 percent from a year earlier, to $52.7 million, with declines in general, classified and preprint ads. Despite increases in online readership, online revenue — primarily from washingtonpost.com and Slate — fell 7 percent to $24.2 million.
Newspaper circulation also declined. For the first quarter of 2012, weekday circulation at The Post fell 9.8 percent, to 492,600. Sunday circulation fell by a more modest 5.2 percent, to 714,600.
The Kaplan education division reported an operating loss of $13.2 million, compared with operating income of $20 million in the first quarter of 2011. Kaplan’s test-preparation operations were the most troubled, losing $10.2 million as competitive pricing pressures and lower-priced online programs offset enrollment increases of 11 percent, with strength in medical and legal bar exam review offerings.
The Kaplan for-profit higher education business, the source of nearly a third of the entire corporation’s revenue, earned just $9 million, down from $50.7 million a year earlier, as efforts to comply with government regulations and respond to criticism of its marketing practices proved costly.
But Kaplan reported signs that it might be able to resume growth after a year of contraction. It said that new student enrollments increased 5 percent in the first quarter. Current student enrollment was down 18 percent from the first quarter of 2011, but up 2 percent from the fourth quarter.
The company also said that in April it sold EduNeering, a Kaplan unit, and would book a $30 million pre-tax gain from the sale during the second quarter.
The company’s cable television revenue was flat, but operating income fell because of increased costs. The division earned $32.8 million, down from $37.7 million a year earlier.
The best performing division was television broadcasting, where revenue climbed 13 percent and operating income jumped 58 percent to $31 million. Revenue at the stations got a boost from a $2.2 million increase in political advertising.