Washington Post 1Q Net Falls 66% On Fewer Student Enrollments
Washington Post Co. (NYSE:WPO) disclosed shrinking first-quarter profits on Friday as the company’s Kaplan division suffered a 10% drop in revenue and is readying for more restructuring.
The media and education company said it earned $15.2 million, or $1.87 a share, compared with a profit of $45.4 million, or $4.91 a share, the year before. Revenue slipped 7% to $1.06 billion.
Slammed by a 48% plunge in new enrollments, Washington Post Co.’s education division slumped 10% to $640.6 million. This crucial business, which includes Kaplan, accounts for the bulk of the company’s profits.
In a red flag, Washington Post Co. said it expects its education profits to “continue to decline very substantially for the remainder of 2011” due to lower student enrollment levels.
“Kaplan is formulating plans that are expected to result in restructuring and other costs that may be material in 2011, but should establish lower cost levels in future periods,” the company said in a statement.
Kaplan has been hit by pressure from the U.S. to improve graduation and loan repayment numbers.
The company’s newspaper division, which includes the Washington Post and a number of other papers, posted a loss of $12.8 million as ad revenues at the Post slid 8%.
Shares of Washington Post Co. slid 2.45% to $421.95 Friday morning, leaving the stock just over 1% in the red on the year.