The newspaper business has been suffering for a while, and that’s the part that pulled down The Washington Post (NYSE: WPO) Company’s Q3 earnings, as the more profitable education and cable TV units failed to offset print losses. Year-over-year, net income fell 85.8 percent to $10.3 million ($1.08 per share) from Q307’s $72.5 million ($7.60 per share). The newspaper company also said operating income declined 63.5 percent in the quarter to $40.3 million from $110.5 million from last year on a $59.7 million goodwill impairment charge and $12.5 million in accelerated depreciation at The Washington Post.
Following a similar pattern of the past several quarters, WaPo’s revenues were up 10 percent to $1,128.7 billion compared to $1,022.5 billion last year. But growth has been limited to the education and cable TV divisions, as well as a small increase at the TV broadcasting division, as the newspaper and mag units saw continued declines.
– Print down, online up: Growth in online revenue at newspapers, as the print side continues to trend downward, was evident at WaPo this time around as well. Online publishing activities, primarily at washingtonpost.com, increased 13 percent to $30.8 million in Q3, rising from last year’s $27.2 million.
– Display up, classified down: For the first nine months, online revs gained 8 percent, coming in at $87.2 million. Display ad dollars grew 32 percent and 20 percent for Q3 and first nine months of 2008, respectively. And as other newspapers have found lately, such as The McClatchy Company (NYSE: MNI), even online classified ad revenue hasn’t been immune from the wider shift away from newspaper listings. The washingtonpost.com’s Q3 classified revs fell 8 percent; the category also slipped 2 percent during the year’s first nine months.
– Newspaper revs drop: Overall, WaPo’s newspaper division revenue totaled $196.2 million in Q3 for a 7 percent decline from $210.2 million. For the first nine months of the year, the division’s revenue fell 9 percent to $599.6 million from $657.2 million during the same period in 2007. Buyouts offered in March were accepted by 231. The early retirement program cost the company $79.8 million in Q2.
– Op income swings to loss: The newspaper segment also posted an operating loss of $82.7 million in Q3, compared to last year’s operating income of $8.8 million. Looking at the first nine months of ’08, the newspaper division’s operating loss was $178.3 million, compared to operating income of $41.5 million for the same time frame as last year. The decline was attributed to the $59.7 million goodwill impairment charge in the third quarter of 2008 and expenses tied to the early retirement program.
– Newspaper ad revs decline: Q3 print ad revenue at The Post slid 14 percent to $97.2 million, from $113.1 million, and slumped 16 percent to $308.6 million for the first nine months of the year. The fall off was blamed on a large decline in classified revenue, along with reductions in retail and supplements.
– Mag revs fall slightly: Magazine publishing Q3 revs totaled $60 million, a 4% decrease year-over-year.