Operating profits of the Washington Post Co. plummeted 49 percent in the first quarter of 1980 from the same period last year despite a 16 percent increase in revenues, the communications firm announced yesterday.
In a statement, the Post Co. blamed higher newsprint costs and startup costs for a new newsprint factory and a new magazine as factors that helped cause the declining earnings.
Not counting an accounting charge that affected earnings in the 1979 period, Post Co. profits fell to $3.86 million (27 cents a share) from $7.66 million (48 cents) a year ago as revenues rose to $151 million from $130 million.
The accounting change, involving the method of tabulating magazine subscription procurement costs, resulted in a one-time charge of $13.5 million (84 cents) in the first quarter of 1979 and represented the aggregate of deferred subscription procurement expenses as of Dec. 31, 1978.
Because of this special charge against profits a year ago, the Post Co. actually had a net loss of $5.9 million in the 1979 period compared with the recent quarter's net income of $3.86 million.
The Post Co. said pretax profits declined in its newspaper and magazine divisions during the first quarter but that broadcasting posted a "slight increase" inpretax earnings. No specific division-by-division earnings figures are provided by the Post Co. on a quarterly basis.
However, in its statement, the company states that newspaper revenues rose 17 percent and that Washington Post newspaper advertising linage rose 5.3 percent in the recent quarter from last year. In addition to The Post, the firm owns newspapers in Trenton, N.J., and Everett, Wash.
Magazine division revenues rose 15 percent, with Newsweek ad revenues up 17 percent, while broadcasting revenues rose 19 percent, "reflecting strong advertising sales," the company said. The post Co. owns four television stations in Michigan, Florida and Connecticut.
In addition, heavy expenses were associated with initial production from the Bear Island newsprint plant in Virginia, in which the Post Co. has a partial interest. The firm's share of first-quarter losses was about $2 million, and that resulted in a quarterly loss of $985,000 from affiliates' operations compared with year-earlier profits of $925,000.
Crown Central Petroleum, the Baltimore oil company that set growth records last year, has reported a decline in first-quarter profits to $11.5 million ($1.80 a share) from $16.2 million ($3.02) in the 1979 first quarter. Sales jumped 41 percent to $306 million from $217 million because of higher oil prices.
Speaking at the company's annual meeting of stockholders, Chairman Henry Rosenberg Jr. said the decline in profits was due principally to a 20 percent decrease in the actual volume of products sold and to lower profit margins for distillate fuels.
Rosenberg said higher revenues reflected only a pass-through of higher crude costs and he cautioned that the gasoline conservation fee, adding 10 cents a gallon to prices, may cause further decreases in volume of products sold. At the same time, a single-quarter performance does not indicate the firm's 12-month operations, he added.