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Washington Post 1Q earnings double, revenue down

May 4, 2012
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WASHINGTON—The Washington Post Co. said Friday that net income doubled in the first three months of the year, even as advertising and education revenue declined.

The media and education company reported net income of $31 million, or $4.07 per share, in the first quarter, up from $15.2 million, or $1.87 per share, in the same period a year ago.

Excluding several one-time items and results from businesses the company has sold, income was $6.7 million, or 83 cents per share, compared with $35 million, or $4.33 per share, a year ago.

Revenue fell 7 percent to $972 million from $1.04 billion. Revenue from newspaper publishing and the Kaplan business fell, while cable TV was flat and broadcast TV was up.

The company is best known for The Washington Post newspaper, but its Kaplan education business currently accounts for 57 percent of its revenue. Kaplan started as a tutoring and test-preparation service but now includes several education businesses, including Kaplan University, a primarily online, for-profit school.

Kaplan was once a growing business. But the U.S. Department of Education has been investigating Kaplan and other for-profit colleges over allegations that they often recruit students who have little chance of graduating and finding jobs. As a result, many of those students leave school with huge debts.

The Kaplan schools have raised admissions standards and given students a trial period before they commit to paying. They also have changed the way they market the program. Kaplan's higher-education division had 75,984 students as of March 31, down 18 percent from a year earlier but up 2 percent from the most recent quarter.

Revenue at Kaplan fell 11 percent to $553 million. It had an operating loss of $13.2 million, compared with operating income of $20 million a year ago.

At Cable One, the Phoenix-based cable TV business, revenue was flat at $190 million, while operating income fell 13 percent to $32.8 million.

Revenue from newspaper publishing fell 8 percent to $142 million. Print advertising revenue at the Post fell 17 percent to $53 million. The division's online revenue, primarily from the Post's website and Slate magazine, fell 7 percent to $24 million. The operating loss for newspaper publishing widened to $22.6 million from $12.8 million.

Besides the Post, the company owns Foreign Policy magazine, regional and Spanish newspapers and other publications.

After the results came out, the company's stock fell $18.53, or 4.9 percent, to close Friday at $357.62.

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