Washington Post Co. (WPO) reported Wednesday its fourth-quarter earnings more than quadrupled from the same period a year ago, lifted by the first quarterly profit in almost two years from its flagship newspaper business and solid sales from its education division.
The year-ago quarter's results include hefty impairment and restructuring charges.
However, print advertising revenue at the company's flagship newspaper were down 9%, reflecting decreases in classified, zones and retail advertising.
For the fourth quarter, the Washington, District of Columbia-based company's net income soared to $81.72 million or $8.71 per share from $18.83 million or $2.01 per share in the year-ago quarter.
The results for the latest quarter include restructuring charges of $0.1 million or $0.01 per share and non-operating unrealized foreign currency losses $0.09 million or $0.10 per share.
The year-ago quarter's results include among others, goodwill, intangible assets and other impairment charges of $69.6 million or $7.44 per share, accelerated depreciation related to the planned closing of the Washington Post's College Park, MD, plant of $5.3 million or $0.56 per share, and expenses and charges in connection with the restructuring of Test Preparation's professional training businesses of $4.3 million or $0.46 per share.
Operating revenues for the fourth quarter increased 6% to $1.24 billion from $1.16 billion in the prior-year quarter.
The company, which owns Newsweek magazine, Kaplan education services and TV properties along with The Washington Post newspaper, said that the increase in revenues is due primarily to strong revenue growth at the education division and increased revenue at the cable division. These were partially offset by revenue declines at the company's newspaper publishing, magazine publishing and television broadcasting divisions.
Amongst others in the industry, in early February, New York-based news provider New York Times Co. (NYT) reported a surge in profit for the fourth quarter as lower expenses and a pension-related gain helped offset a decline in revenues. The publisher of The New York Times and The Boston Globe said its net income jumped to $90.92 million or $0.61 per share from $27.65 million or $0.19 per share in the prior year. Total revenues for the fourth quarter declined 11.5% to $681.15 million from $769.50 million in the previous-year quarter, primarily due to lower print advertising.
Washington Post's operating expenses for the fourth quarter increased 8% to $1.02 billion from $0.95 million in the prior-year quarter. Operating income rose to $146.18 million from $62.26 million a year ago.
Segment wise, the company's education division revenues for the fourth quarter grew 16% to $709.27 million. Higher education revenues surged 30% to $420.45 million, while test preparation revenues declined 9% to $102.59 million. Kaplan International revenues increased 13% to $155.17 million. Operating income for the division surged 30% from the prior-year period to $79.59 million.
Cable television division revenue for the quarter rose 4% from the year-ago period to $190.57 million, boosted by continued growth in the division's cable modem and telephone revenues. As at December 31, 2009, the segment's Revenue Generating Units or RGUs were even with the prior year-end at 1.39 million due to a reduction in basic and digital subscribers, offset by continued growth in high-speed data and telephony subscribers. Operating income for the division increased 2% to $46.9 million and includes a $7.7 million gain arising from changes to the cable division retiree health care benefits program. Excluding this gain, operating income declined in the latest quarter due to increased programming, depreciation and general and administrative costs.
Newspaper publishing division revenue for the quarter was $193.35 million, down 4% from the previous-year quarter, while print advertising revenue at The Post declined 9% to $92.6 million from the year ago quarter, largely due to decreases in classified, zones and retail advertising, offset by an increase in general advertising. Revenue generated by the company's newspaper online publishing activities, primarily washingtonpost.com, increased 1% to $31.5 million. Operating income for the division was $3.2 million, compared to operating loss of $14.4 million in the same period last year. Excluding accelerated depreciation and goodwill impairment losses, operating results improved due to expense reductions. This was the division's first quarterly profit in nearly two years.
Revenue for the television broadcasting division decreased 7% year-over-year to $80.24 million due to weaker advertising demand in most markets and most product categories, particularly automotive. The division's operating income for the quarter declined 22% to $29.0 million.
Revenue for the magazine publishing division, which includes Newsweek, slipped 30% from the year-ago period to $52.44 million due to a 36% reduction in advertising revenue at Newsweek, resulting from fewer ad pages at both the domestic and international editions. Operating income for the quarter declined to $0.4 million from $10.9 million in the year-ago period. Excluding early retirement program expense, the division's operating results declined on lower revenues and a reduced pension credit, offset by a decline in subscription, editorial and manufacturing expenses at the domestic edition of Newsweek.
For fiscal year 2009, Washington Post's net income surged 42% to $91.85 million or $9.78 per share from $64.78 million or $6.87 per share in the prior year.
Operating revenues for the year increased 2% to $4.57 billion from $4.46 billion last year.
In Wednesday's regular trading session, WPO is trading at $418.00, up $5.49 or 1.33% on a volume of 17,743 shares. In the past 52 weeks, the stock has been trading in a range of $300.16-$495.60.
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