Washington Post Co. quarterly profit falls
EmptyNEW YORK -- Washington Post Co. posted a 13% fall in quarterly profit Friday, but its shares rose 5% as slower U.S. jobs growth was expected to boost demand for its Kaplan educational business.
Like other U.S. newspaper publishers, the Washington Post's second-quarter result was weighed by declines in print advertising sales and circulation as it faced competition from the Internet for readers and marketers.
Unlike them, the company has Kaplan -- a major business division that is reporting gains from a strong market for test-preparation services.
"When people lose their jobs or fear losing their jobs, they start to think about going back and retraining through higher education for more talent-specific opportunities," said Thomas Russo, an analyst for Gardner Russo & Gardner.
U.S. job growth in July was the slowest since February, and the jobless rate ticked up to 4.6%, its highest since the start of the year, government data showed Friday.
The Washington Post's net profit fell to $68.8 million, or $7.19 per share, from $78.7 million, or $8.17 per share, a year ago.
Excluding tax-related special items, earnings came to $8.16 per share, below the average forecast of $8.42 from Wall Street analysts, according to Reuters Estimates.
The company's education division revenue, which includes Kaplan, rose 23% to $503 million. That helped push up overall revenue by 8% in the second quarter to $1.05 billion.
The average analyst forecast was for revenue of $1.03 billion, according to Reuters Estimates.
Newspaper revenue fell 7% to $228 million in the quarter, with print advertising sales at the Post falling 13% to $128 million. The company said the fall was due to reductions in real estate ads, as well as classified job ads.
The Post's circulation declined 2.9% in the first six months of 2007, compared to the same period in 2006.
Cable television revenue rose 9% to $154 million.
The company's shares rose $46.09, or 5.82%, to $837.99 in late-afternoon trading on the New York Stock Exchange.