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WASHINGTON (AFX) - Second-quarter earnings for The Washington Post Co. were nearly flat despite a gain in revenue as charges from early retirement buyouts at The Washington Post newspaper weighed on results.
The results reported Friday appeared to miss Wall Street estimates, and the company's shares fell $11.10, or 1.4 percent, to close at $754.41 on the New York Stock Exchange.
The publisher of the Post and Newsweek magazine and owner of educational services provider Kaplan Inc. earned $78.5 million, or $8.17 per share, after preferred stock dividends for the three months ended July 2 compared with $78.5 million, or $8.16 per share, during the same period last year.
Revenue grew 8 percent to $969.0 million from $897.6 million, driven largely by an 18 percent increase at Kaplan.
The 2006 results included a charge of $31.4 million charge, or $3.27 per share, from the company's early retirement buyouts of employees at The Washington Post and the corporate office. Most of the buyout expenses are drawn from the company's pension plan. Newly acquired Kaplan businesses resulted in a charge of $4.8 million, or 50 cents per share.
Those were partially offset by one-time gains of $6.4 million, or 67 cents per share, from Hurricane Katrina-related insurance claims and $19.6 million, or $2.04 per share, from the sale of securities.
Excluding items, the company earned $9.23 per share.
Analysts polled by Thomson Financial were looking for earnings of $9.51 per share, on average, on revenue of $985.4 million.
Revenue at the Post's newspaper division was up 4 percent to $245.6 million, driven in part by growth at the company's online division, which includes washingtonpost.com and the online magazine Slate. However, higher newsprint costs, as well as the buyout expenses, dragged on the division's results.
The Post's educational division posted revenue of $409.2 million, up sharply from $345.8 million in the year-ago quarter. Kaplan also acquired two companies during the quarter -- an Australian financial services education firm and a company that makes a reading program for struggling students.
The cable television unit had a 9 percent revenue growth to $141.1 million, and revenue at the Post's television broadcasting division inched up 1 percent to $89.0 million. The magazine unit, which publishes Newsweek, dropped 14 percent to $84.2 million, due largely to the timing of a trade show sponsored by the division and a drop in ad sales.
For the first six months of 2006, the Post said its net income rose 7 percent to $154.9 million, or $16.12 per share, up from $144.6 million, or $15.04 per share, in the 2005 half. Revenue was up 11 percent, to $1.92 billion from $1.73 billion in the first half of last year. Copyright 2006 Associated Press. All rights reserved. This material may not be
Copyright 2006 AFX News Limited. All Rights Reserved.
