The Washington Post Co. reports drop in earnings


The Post Co. reported net income of $44.7 million for the second quarter, or $6.02 a share, down from $51.8 million or $6.84 a share. Revenues for the second quarter rose to $1.02 billion, up 4 percent from $989.1 million a year earlier. (© Jonathan Ernst / Reuters)

The Washington Post Co. reported a 14 percent drop in earnings for the second quarter of 2013, but it showed higher profits in its biggest continuing operations, including broadcast television, cable and Kaplan education.

The company’s flagship newspaper continued to suffer large print circulation declines, but revenue for the newspaper division fell only slightly thanks to sharply higher online ad sales. Although the newspaper division posted another loss, it was largely due to an accounting provision for pensions and early retirement expenses.

The Washington Post Co. reported net income of $44.7 million for the second quarter, or $6.02 a share, down from $51.8 million, or $6.84 a share. Second-quarter revenue increased to $1.02 billion, up 3 percent from $989.1 million a year earlier.

The company noted that net income from continuing operations rose 24 percent and that the second quarter of 2012 included $15.8 million of net income from discontinued operations. The discontinued operations include the Herald of Everett, Wash.; Avenue100 Media Solutions; and three Kaplan education units, Kidum, EduNeering and Kaplan Learning Technologies.

The company’s biggest division, Kaplan education, showed sharply higher profits thanks to cost reductions. Operating income in the second quarter jumped to $23.7 million from $3.7 million the year before. Revenue for the division fell 1 percent to $548.2 million.

But Kaplan’s higher-education unit continued to shrink as it implemented a previously announced restructuring plan to close nine campuses. Student enrollment fell 8 percent from the second quarter of 2012 and 7 percent from the end of the first quarter of 2013. Excluding campuses that closed, enrollment was down 4 percent from the year before.

Revenue and profit both rose, however, at the education division’s Kaplan Test Preparation unit, driven by strength in pre-
college, nursing and bar review courses that offset declines in graduate programs.

The cable television division reported higher second-quarter profit and revenue, as reductions in labor costs and bad-debt expenses offset higher programming and depreciation costs. The division’s operating income rose 16 percent to $44.7 million in the second quarter as revenue rose to $204.6 million, or 5 percent, from the second quarter of 2012.

Operating income at the company’s regional television stations rose 9 percent in the second quarter to $47.7 million, and revenue rose 4 percent to $99.3 million. Results rose in part because the NBA Finals bolstered ad revenue at the company’s Miami and San Antonio ABC affiliates.

Results for the company’s newspaper division, which includes the flagship Washington Post newspaper and Slate online publication, were mixed. It reported an operating loss of $14.8 million for the second quarter, higher than the $12.6 million operating loss a year earlier. But the results include a $16.8 million pension charge, which is a non-cash item because the pension plan is fully funded. Revenue edged down 1 percent to $138.4 million.

Print operations showed continued deterioration. Print advertising revenue fell again but at a somewhat slower pace, of 4 percent, to $54.5 million. Print circulation for the second quarter was not given, but the average circulation for the first six months of 2013 fell 7.1 percent to 447,700 on weekdays and 7.6 percent to 646,700 on Sundays compared with the first six months of 2012.

The division’s online revenue jumped 15 percent over the second quarter of 2012 to $29.8 million. Online display advertising rose by 25 percent, but online classified ads fell 7 percent compared with the second quarter a year earlier.

The newspaper division’s results for the second quarter of 2013 also included $5.7 million and $19.6 million increases in early retirement and severance expenses, respectively. Newsprint costs tumbled 17 percent, primarily because of a decline in newsprint consumption, the company said.

The Washington Post began charging frequent users of its Web site this summer in an effort to capi­tal­ize on consumers’ migration to online platforms for news. The “paywall” did not begin until after the second quarter.

The company’s stock has risen steadily this year, jumping more than 50 percent since January. It rose 2 percent Friday to about $560 a share.

Steven Mufson covers energy and other financial news.
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