Post Co. Profit Falls 16% in First Quarter

First-quarter profit at The Washington Post Co. was down 16 percent, compared with last year, the company reported yesterday, as advertising revenue at The Washington Post newspaper slumped 16 percent, among the sharpest drops in the industry.

For the first three months of 2007, Post Co. reported profit of $64 million ($6.70 per share) and revenue of $986 million, compared with profit of $76 million($7.95) and revenue of $948 million in the comparable quarter last year.

The earnings numbers fell short of Wall Street expectations. Post Co. stock closed yesterday at $766.55 a share, down $2.35, or 0.3 percent.

The company attributed the decline in profit to steep drops in real estate advertising and a continued fall-off in classified advertising. The Washington real estate market was unusually hot in the first two quarters of 2006, compared with the rest of the country, but experienced a sharp drop in mid-summer. Accordingly, real estate advertising in The Post during the first half of 2006 was strong.

In comparison, first-quarter ad revenue was down 6 percent at the Tribune Co. and down 3 percent at the New York Times Co.

Overall revenue at The Post Co.'s newspaper division, which includes The Post, the Herald in Everett, Wash., the Express and several smaller Washington area newspapers, was down 10 percent in the quarter.

The Post's daily circulation for the first quarter fell 3.9 percent, while Sunday circulation fell 3.3 percent.

Revenue at the company's online division, primarily washingtonpost.com, was up 10 percent for the quarter, well off the pace of the first quarter of 2006, when online revenue jumped 34 percent, compared with the first quarter of 2005.

Growth at The Post Co. came largely from its Kaplan education division, where revenue rose about 16 percent in the first quarter, to $476 million, from $409 million. Like washingtonpost.com, however, Kaplan's 2007 growth has slowed. In the first three months of last year, Kaplan's revenue surged 26 percent over the comparable period of 2005.

"Kaplan's results in the first quarter of 2007 are in line with our expectations," Post Co. Chairman Donald E. Graham said in a statement. "As I wrote in our 2006 annual report, 'Kaplan will never be a business where the quarterly results look smooth. Two-thousand-and-six started with a bang; 2007 should get better as the year goes on.' "

Elsewhere at The Post Co., first-quarter revenue at the company's six television stations fell 6 percent, compared with last year, when the stations had a wealth of mid-term political advertising.

At Cable One, The Post Co.'s small cable division, first-quarter revenue rose 10 percent. At the company's magazine division, primarily Newsweek, first-quarter revenue fell 18 percent.

The Post Co. does not disclose profit for its individual divisions.