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Washington Post posts flat profit on items By David B. Wilkerson, MarketWatch Last Update: 11:03 AM ET Aug 4, 2006
CHICAGO (MarketWatch) - Washington Post Co. reported a second-quarter profit that was about flat with that of the prior year due to a number of non-recurring items, including costs related to the recent acquisition of education businesses at Kaplan and early retirement plan buyouts at The Post.
The company (WPO) said it earned $78.7 million, or $8.17 a share, compared with a profit of $78.8 million, or $8.16 a share, a year earlier.
Results in the latest three months included more than $57 million in extraordinary items. These include charges related to early retirement plan buyouts at The Washington Post newspaper and the corporate office, costs related to recently acquired Kaplan businesses, and gains on insurance recoveries from cable division losses related to Hurricane Katrina and the sales of marketable securities.
Excluding these items, Washington Post Co. would have earned $9.23 a share in the second quarter of 2006.
Revenue rose 8% to $897.6 million, primarily due to an 18% top-line increase at the Kaplan Education division.
Analysts polled by Thomson First Call were expecting to see a profit of $9.51 a share on revenue of $985.4 million. Washington Post Co. shares were down $5.50 at $760 in morning trading.
At Kaplan, revenue rose to $409.2 million from $345.8 million. Higher education revenue jumped 20%, while supplemental education revenue improved by 17%, bolstered by a 23% top-line improvement in the test preparation category. Newspaper publishing revenue rose 4% to $245.6 million, with most of the growth coming from the company's online properties, Washingtonpost.com and Slate. Print advertising revenue was up just 1% at $148.3 million, reflecting the industry's ongoing difficulties. A large overall decline in classified advertising mostly offset gains in real estate, retail and national ad sales.
Online publishing revenue rose 36% to $25.3 million. At the company's television stations, revenue was up 1% to $89 million, due to a modest increase in political ad revenue.
Difficult comparisons with year-ago results in magazine publishing led to a 14% decline in revenue at that division, to $84.2 million. Newsweek published a special issue in the second quarter of 2005, and did not publish one in the latest three months, causing a reduction in ad pages.
Washington Post's cable systems generated $141.1 million in revenue, a 9% increase over the prior year, led by greater demand for broadband service and a $3 monthly basic cable rate increase that went into effect in February. End of Story
David B. Wilkerson is a reporter for MarketWatch in Chicago.