The Washington Post Company Thrives as the Newspaper Withers

In its quarterly earnings report just filed with the SEC, the Washington Post Co. reports strong results, even though the metro newspaper of the same name continues to perform poorly in all categories.

As with other poor financial performers in the traditional newspaper industry, this raises the obvious question of whether and how long the major paper in the nation's capital will be sustainable.

First, the results:

  • Print advertising revenue at the Post declined 9 percent for the fourth quarter and 23 percent for the year in 2009, down to $317 million from $410.4 million in 2008.
  • Daily circulation at the Post declined 5.9 percent, and Sunday circulation declined 4.7 percent in 2009.
  • The newspaper's online performance was also dismal. Online revenue fell 8 percent to $99.6 million last year, from $108.3 million in 2008. In the fourth quarter, the newspaper's online revenue edged up 1 percent from the fourth quarter of 2008. (But even this slight improvement is deceptive, because the company included an extra week of operating results in this particular filing.)
  • The Post closed its College Park, MD, printing plant in July 2009 and consolidated other operations. The company also laid off or bade early farewells to hundreds of employees.
  • Overall newspaper publishing revenue declined four percent in the fourth quarter and 15 percent for the past fiscal year.
  • Thanks to cost-cutting, the newspaper division's total operating loss was $163.5 million in 2009, which is an improvement from its operating loss of $192.7 million in 2008.
The bad news at the flagship newspaper was echoed at the company's magazine division (Newsweek), which reported a 27 percent revenue decline for the year, including a jaw-dropping 30 percent downshift in Q-4.

Still, the company overall reported very strong growth:

"(N)et income of $91.2 million ($9.78 per share) for the fiscal year ended January 3, 2010, up from $65.8 million ($6.87 per share) for the fiscal year ended December 28, 2008. Net income for the fourth quarter of 2009 was $82.2 million ($8.71 per share), up from $18.8 million ($2.01 per share) for the fourth quarter of 2008."


These results are almost entirely due to strong performance in the Kaplan's Education Division, which is as close to a cash cow as any major media company in the country has right now.

Here, revenue in 2009 increased to $2,636.6 million, up 13 percent from 2008, 16 percent in the fourth quarter.

So, if you're looking into a crystal ball at the Post's future, the question boils down to this: How long will management continue to humor the decline of its hoary old newspaper?

The answer: As long as the lucrative results continue at Kaplan's.

Related coverage here at BNET Media:
NY Times: Earnings Good, Survival Still in Doubt
Both the Washington Post and Newsweek Are Loss Leaders At WPO
Is the Washington Post Sinking its Own Ship?
Newsweek's Redesign: Nice Try
Washington Post's Kurtz Loses Hope for Newspapers
WashPost Ad Revenue Plummets by One-Third in Q-1