The Washington Post Co. reported a fourth quarter 2012 loss of $45.4 million, or $6.57 a share as it took $113 million of charges for goodwill write downs and restructuring, mostly in its Kaplan education subsidiary. A year earlier the company earned $61.7 million or $8.03 a share
But The Post said that, after excluding those and other one-time items, net income from continuing operations rose to $78.8 million, up 15 percent from the fourth quarter of 2011. It also stressed that its cash flow and cash positions were strong.
For all of 2012, The Post earned $131.2 million, or $17.39 a share, up 13 percent from $116.2 million, or $14.70 a share, in 2011.
Results at the company’s four main subsidiaries were mixed. The Kaplan education unit and the newspaper division continued to struggle; revenues at each dropped about 6 percent and operating income fell sharply. However revenues and profits at The Post’s regional television broadcast stations surged thanks to a flood of political advertising. The company’s cable subsidiary also reported solid earnings.
Advertising and circulation trends at the company’s news division remained on a downward course, though, thanks to cost-cutting, the division managed to earn $2.6 million in the fourth quarter, down from $6.8 million in the fourth quarter of 2011. Cost cutting is expected to continue; in the past week two media Web sites have reported cutbacks on the paper’s business and mobile technology areas.
Print advertising at The Washington Post slid 12 percent in the fourth quarter to $67.5 million. A 5 percent increase in ad revenue to $33.1 million from the company’s online operations – primarily washingtonpost.com and Slate – made up about half the print ad decline in the fourth quarter.
Daily circulation at The Washington Post declined 8.6 percent to an average of 471,800 for all of 2012 and Sunday circulation dropped 6.2 percent to an average of 687,200.
One benefit of the paper’s woes: lower newsprint costs. Those expenses were down 10 percent in 2012 and in the fourth quarter. The company also announced that it had sold its 49 percent interest in troubled Bowater Mersey Paper Co. for a nominal amount. No gain or loss was recorded as the investment had already been written down to zero.
The company noted that accounting charges for pension plans depressed the newspaper’s earnings even though the company has made no cash contributions to the over-funded plans for many years. For all of 2012, the newspaper lost $53.7 million, compared to $21.2 million in 2011. But the non-cash pension charges amounted to $42.4 million in 2012 and $25.3 million in 2011.
The company’s big Kaplan education division – which accounted for 55 percent of The Post Co.’s revenues in 2012 — continued to struggle as well. Revenues fell 6 percent in the fourth quarter compared to the previous year and fell 9 percent for the year.
Restructuring costs and goodwill charges weighed heavily on Kaplan’s operating income as it continued to close campuses and reduce the workforce at its online programs. The company took $111.6 million of charges in the fourth quarter for the impairment of goodwill and other assets at Kaplan Test Prep as well as $35.9 million in restructuring charges as it closes facilities, mostly at Kaplan Higher Education. Overall, the entire Kaplan division lost $111.9 million in the fourth quarter.
