The Washington Post Co. reported that its first quarter net income slid 85 percent from the same period a year earlier, thanks in part to a weak advertising market.
Net income dropped from $31.0 million ($4.07 per share) to $4.7 million ($0.64 per share) before special charges.
After excluding charges attributable to early retirement, severance, restructuring and foreign currency losses, net income was only down 54 percent, to $6.1 million from 13.4 million in 2012.
The newspaper division led the way with revenues declining four percent to $127.3 million. Print advertising continued a multi-year slump with a drop of eight percent to 48.6 million, and is now down 56 percent since 2008. Digital display advertising increased by 16 percent, but it wasn’t nearly enough to offset the revenue decline in print advertising.
Readers reacted negatively to the Post’s price increase implemented in January, sending the circulation down for both daily and Sunday newspapers by 7.2% and 7.7% respectively. The daily circulation stood at an average of 457,100 in the quarter, and Sunday at 659,000. Nine years ago, Sunday circulation stood at 1,024,000.
About the only good news for the newspaper division, if you can call it that, is that after non-cash pension charges, the division lowered its losses from $12.1 million in 2012 to $11.6 million this year.
The Post will be launching a paywall this summer, which should provide a much needed revenue boost. But with advertising revenues in free fall, it’s unlikely that the move will make more than a small dent in the newspaper division’s losses, and will only delay the inevitable.