Washington Post’s fourth-quarter profit falls

Washington Post Company reported a lower quarterly profit on Wednesday because of falling advertising revenue at its flagship newspaper and lower enrollment at its for-profit colleges, Reuters reported on Wednesday
.


The Post’s fourth-quarter net income fell to $79m, or $9.42 a share, from $81.7m, or $8.71 a share, a year ago. As a result of the company’s share repurchases, there were fewer shares outstanding in 2010.

Revenue grew slightly to $1.19bn as its television broadcasting division brought in more advertising. Revenue at that unit rose by 28 per cent to $102.9m.

One analyst who follows the company was expecting a profit of $8.72 a share on revenue of $1.19bn. Enrollment at the Post’s Kaplan education unit, which accounts for about two-thirds of the company’s revenue, fell by eight per cent to 96,701 students as at December 31. New enrollment during the quarter fell by 47 per cent.

Enrollments at for-profit colleges, such as those run by Kaplan, have fallen in recent quarters as they tighten admission standards and deal with scrutiny from the Obama administration. Negative publicity is hurting student intake at these colleges, criticised for overcharging students, burdening them





with debt and leaving them without good prospects of finding work.

The Obama administration wants to institute a “gainful employment rule,” which would require the schools to graduate a higher percentage of students than many of them do, or risk the substantial amount of federal aid that they receive.

The S&P 1500 Education Services sub-index almost halved in the April-December period last year as investors feared the new rules would dent growth at these colleges.

Newspaper publishing revenue fell by three per cent to $188.4m. Advertising revenue at The Washington Post fell by 12 per cent. The Post, like other newspaper publishers, has been dealing with a revenue decline that has raised existential questions about the future of the United States newspaper business.

Last year, the Post sold the loss-making weekly magazine Newsweek to audio equipment magnate Sidney Harman for a token price of $1. Other US newspaper publishers, including the New York Times Company and USA Today publisher Gannett, have seen advertising sales recovering, but not in any consistent way from month to month.

Separately, the Washington Post newspaper said that former National Journal deputy editor, Mr. Patrick Pexton would become the newspaper’s new ombudsman.