Washington Post reports surge in 2Q earnings, boosted by education unit, lower costs

Washington Post reports surge in 2Q earnings

WASHINGTON — The Washington Post Co. reported a nearly eight-fold surge in second-quarter earnings Friday, helped by a big jump in profits at its education division and lower expenses.

The company, which is selling Newsweek magazine as it pulls back from its traditional identity as a publisher, has relied for several years now on the Kaplan education business for growth.

Kaplan delivered again in the second quarter with a 15 percent increase in revenue and an 88 percent jump in operating profit.

But the results were tempered by looming changes in federal education policy that will have an uncertain effect on the business.

The U.S. Senate heard testimony Wednesday on a Government Accountability Office investigation that found questionable recruiting tactics, high loan default rates and low graduation and job placement rates at for-profit colleges. Kaplan and 14 other institutions were singled out for criticism.

Washington Post shares fell $28.40 a share, or 6.9 percent, to $380.50 in morning trading Friday after sinking to a 52-week low of $375 earlier in the session.

Overall, the Post Co. reported net income of $91.9 million, or $10 per share, for the three months ended July 4. That’s up from $12.2 million, or $1.30 per share, a year ago, when the company absorbed $56.8 million in expenses tied to an early retirement program at the namesake newspaper.

Revenue climbed 11 percent to $1.2 billion from $1.08 billion a year ago.

Along with growth at Kaplan, the Post Co. also benefited from a rebound in spending on television advertising.

Revenue at the Post Co.’s six broadcast stations climbed 24 percent to $82.6 million as demand for commercial time picked up. Operating profit more than doubled to $29.8 million.

The uptick in spending on television ads — an industrywide trend — has not extended to print media, though newspaper advertising declines have eased since the bottom of the recession.

The Post Co.’s newspaper division saw a modest 2 percent lift in revenue despite a 6 percent decline in print ad sales at its flagship daily. That and lower retirement expenses helped the newspaper division narrow its losses to $14.3 million from $89.3 million.

Revenue rose 2 percent to $190.6 million at the company’s cable division, while operating profit climbed 10 percent to $43.8 million.