Market Punishes Washington Post (Update)

Washington Post reports weak earnings on plunging ad sales, sending its stock lower.
Author:
Publish date:

Updated from 11:03 a.m. EDT.

No quarter has been offered the teetering newspaper business of late, and first-quarter results from the

Washington Post

(WPO)

provided no indication that it will be given any time soon, as the company failed to meet Wall Street targets by a wide margin.

The news sent Washington Post stock sharply lower Friday. It closed at 365.88, down 52.71, or 13%.

The company, whose properties also include

Newsweek

and Kaplan, the educational services outfit, said it lost $19.2 million, or $2.04 per share, in the quarter. A year ago, it posted a profit of $38.8 million, or $4.08 per share.

Those results include a $13.4 million write-down in the value of the

Washington Post

newspaper itself, as well as $6.6 million to pay for the early retirements of employees at

Newsweek

. The company also took a $16.9 million charge for restructuring at Kaplan.

The company said that, on an EPS basis, those items totaled $2.45. Backing that number out of its bottom line, the company was in the black, with adjusted earnings of 41 cents a share in the quarter.

Still, that's a bad miss of Wall Street estimates. Analysts as polled by Thomson Reuters were looking for a first-quarter profit of $3.48.

In a pre-market press release, the company said first-quarter revenue fell 1% to $1.05 billion from $1.06 billion. For the disappointing results, the company cited the by now familiar media-company woes: declining ad sales across its print and television businesses.

Newspaper revenue alone tumbled 22% from the year-ago quarter, while print advertising at the Post fell 33%. The company said it will likely write down the value of the newspaper by another $18.5 million over the course of the year as it closes printing presses and consolidates other operations.

The company's lone bright spot was Kaplan, where revenue grew 9% to $593.5 million from $543 million a year ago.

Other newspaper stocks were under pressure as well.

E.W. Scripps

(SSP) - Get Report

was off 6.6%, and

Journal Communications

(JRN)

was down 7.7%.

The New York Times

(NYT) - Get Report

, meanwhile, had slipped only 1%.

Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.