The Washington Post Company
's (
WPO
) second-quarter 2012 earnings from continuing operations came in
at $5.38 per share, down approximately 22% from $6.88 earned in the
prior-year quarter. The decline reflected slump in the students'
enrollment and soft advertising demand.
On a reported basis, including one-time items and discontinued
operations, the company posted quarterly earnings of $6.84 per
share, up from $5.74 posted in the year-ago quarter.
Revenue for the quarter dropped 5% to $1,006.9 million from the
prior-year quarter, reflecting sluggish performance in the
Education and Newspaper Publishing divisions, partially offset by
strength witnessed in Television Broadcasting and Cable Television
divisions.
Education division
's revenue went down 9% to $558.4 million, reflecting a 19% fall in
Higher Education revenue, a 4% drop in Test Preparation revenue,
and a 6% decline in Kaplan Ventures revenue, partially offset by a
7% rise in Kaplan International revenue. The Education division saw
operating income of $3.4 million compared with $21.5 million in the
prior-year quarter.
Total student enrollment fell 14% year-over-year and 11%
sequentially to 67,605. The company hinted that new student
enrollment rose 3% during the first six months of 2012 at Kaplan
University and Kaplan Higher Education Campuses.
Television Broadcasting
revenue climbed 13% to $95.6 million during the quarter, whereas
operating income surged 34% to $43.7 million, attributable to
healthy advertising demand. Moreover, political advertising also
contributed $4.4 million to the revenue. Cost containment efforts
helped in improving operating results.
Cable
Television
division's revenue rose 2% to $195.6 million. The division
benefited from revenue growth registered across internet and
telephone service revenues, but was offset by higher promotional
discounts and fall in basic video subscribers' base. The division's
operating income dropped 5% to $38.4 million attributable to higher
programming expenses.
Basic video subscribers fell 4% to 612,729. On the other hand,
high-speed data subscribers rose 4% to 462,426 and telephony
subscribers grew 8% to 187,095.
Newspaper Publishing
revenue came in at $151.8 million, down 7% from the year-ago
quarter. Print advertising revenue at The Washington Post tumbled
15% to $56.7 million, reflecting a fall in general advertising.
Revenue from newspaper online publishing activities, principally
washingtonpost.com and Slate, jumped 8% to $26.3 million, whereas
display online advertising revenue climbed 14%. Online classified
advertising revenue on washingtonpost.com dropped 2%.
During first-six months of 2012, daily and Sunday circulation at
the Post fell 9.3% and 6.1%, respectively, from the year-ago
period.
The Newspaper division's operating loss widened to $15.9 million
from a loss of $2.9 million witnessed in the prior-year
quarter.
Currently we maintain our long-term Neutral recommendation on
the stock. Moreover, The Washington Post Company, which faces stiff
competition from
The New York Times Company
(
NYT
), holds a Zacks #3 Rank that translates into a short-term Hold
rating.
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