The Washington Post Company which is made up of an assortment of properties announced increased profits which cheered Wall Street.
Today, the Washington Post Co. reported rocketing annual profit for 2009, raking in $91.2 million, compared with $65.8 million in 2008. The company “shot the lights out,” as they say on Wall Street, and its stock jumped 3% on the news.
Too bad those results have very little to do with performance at local DC rag The Washington Post. See, the Post company operates a whole slate of non-newspaper businesses. The education business, for example, brought in $2.64 billion in revenue in 2009. That includes the Kaplan test-prep company that helped some of you score high enough on the GRE to get into journalism school.
The ink-and-wood-pulp business was another matter entirely; the newspaper division recorded an operating loss of $163.5 million in 2009. (In fairness, that’s not as bad as 2008’s $192.7 million.) An early-retirement program introduced in the first quarter of 2009 claimed 221 employees, and the paper closed a printing plant in July. The cost-reduction strategies have yet to bear fruit.
If you’re not nauseated yet, we can look at some grim revenue numbers after the jump.
All this bloodletting accompanied declining revenues. Washington Post’s newspaper division saw a 15% decline in revenue from 2008 to 2009, with print advertising revenues down a horrendous 23%. “The print revenue declines in 2009 are due to large decreases in classified, zones and retail advertising,” the Post company said in its earnings statement. In other words, Craigslist and a horrible economy crippled the paper. Online, things were a little better, but not much. Revenue from display ads climbed a mere 2% in 2009. Daily circulation fell 5.6%, and 4.7% fewer people bought the paper on Sundays.
As they say you need to read beyond the headline numbers. Circulation and revenue continue to drop and the newspaper continues to be a drag on the company as a whole.
Unlike other large city newspapers where decisions have been made to shutter the print version and move online, the Post will continue as long as the other operations can subsidize the paper even if it’s not a good business decision.