Market Punishes Washington Post (Update)
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.
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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 E. W. Scripps Company Class A Report
was off 6.6%, and
Journal Communications
(JRN)
was down 7.7%.
The New York Times
(NYT) - Get New York Times Company Class A Report
, meanwhile, had slipped only 1%.
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