Thought declining profits in the newspaper industry were bad enough?
The Washington Post Company reported on Friday a net loss of $6.2 million for the third quarter due to the continued troubles of its Kaplan Education division and the declining revenues at its newspaper publishing division.
In the same frame last year, the company posted profits of $60.9 million and revenue of $1.18 billion, but this time around a revenue decline of 13 percent (to $1.03 billion) led to the loss.
Kaplan has been the company’s savior while publishing struggled, but an enrollment scandal last year had led to increasingly poor results from that sector this year. In the third quarter, enrollment declined 29 percent as compared to last year while income dropped 83 percent to $18 million.
In its earnings report, the Post blames higher costs from restructuring the challenged division, as revenues only declined 18 percent.
But at least Kaplan is still in the black. The publishing business reported another quarterly loss, this time of $9.9 million, as opposed to $1.7 million from last year’s third quarter. On the year, the newspaper division has actually lost less money than it did in the first nine months of 2010.
Weak advertising sales are driving the losses, and both print ad revenue and online revenue dropped in the quarter. Print declined 20 percent while online ads, coming mostly from washingtonpost.com and Slate, dropped 14 percent.
The company's share price is down 2 percent so far on Friday.