The Washington Post Co. reported a 4 percent decline in fourth-quarter earnings from the year before, as losses from an Internet employment venture offset increased advertising revenue, lower newsprint costs and higher cable subscriber revenue.
Fourth-quarter 1999 earnings totaled $61 million, or $6.09 a share, compared with $63.8 million ($6.30 a share on a larger number of shares) in the same quarter the year before.
Last quarter's results were well below financial analysts' forecasts averaging $7.23 a share, according to First Call/Thomson Financial. Post Chief Financial Officer Jay B. Morse Jr. said, "We don't give the street guidance" about earnings expectations. "They're out there shooting in the dark. We were really pleased with the year."
For all of 1999, The Post Co. earned $225.8 million ($22.30), a slight percentage gain over 1998 net income of $222.9 million ($21.90), excluding a gain of $194.4 million in 1998 from the sale of the company's stake in Cowles Media Co. and other one-time transactions. Including those results, 1998 net income was $417.3 million, or $41.10 a share.
Revenue from operations in 1999 was $2.2 billion, a 5 percent gain from $2.1 billion the year before.
The Post lost $7 million in the past quarter on its equity investments in affiliates due primarily to its majority stake in money-losing BrassRing Inc. BrassRing is a venture created last September to process online resumes, operate career fairs and provide other hiring services. Losses from investments in affiliates totaled $2 million in the same quarter the year before.
BrassRing represents a new move by The Post to compete with Internet rivals for help-wanted advertising and counter potential losses of print advertising. Last year's newspaper classified advertising lineage was flat, Morse said, after large annual increases in prior years. Classified revenue increased.
Total advertising volume and ad revenue at The Washington Post rose 3 percent in 1999 from the year before. Daily circulation at the newspaper was unchanged from 1998 while Sunday circulation declined by 1 percent.
The Post company spent $85 million last year on Internet ventures--$20 million more than initially planned--offset by about $17 million in revenue, Morse said. The company's Washingtonpost.Newsweek Interactive unit operates Web news sites for The Post and Newsweek magazine.
Other Web-related investments funded a new electronic-commerce site providing online educational services to families. Revenue in the education and career services area increased 32 percent last year, to $257.5 million, but the operating loss increased fivefold, to $38 million.
In 1999, newspaper division revenue rose 3 percent, to $875 million; broadcasting revenue declined 4 percent, to $341.7 million; cable television revenue rose 13 percent, to $336 million, while magazine revenue was essentially unchanged, at $401 million. Operating income increased in the newspaper and magazine divisions, but fell in broadcasting and increased slightly at the cable television unit.