While The Washington Post Company (WPO) may be best known for its namesake newspaper, the company's main business has morphed from print media and television to education. The centerpiece of The Washington Post’s post-secondary education business is career college Kaplan University, offering an array of programs to students who want to earn academic certificates, diplomas, and degrees.
Enrollment has sagged, though. Kaplan University's student enrollment nationwide totaled 92,293 at the end of March, down 23 percent from a year earlier. Under pressure from federal regulators worried about student lending, Kaplan has adopted a more selective admissions policy. Kaplan has become more selective to ensure that a larger percentage of its students repay those loans, which are guaranteed by the U.S. government.
Education generated $640 million of The Washington Post Company's operating revenue in the first quarter of 2011, down 10 percent from the same period last year. First-quarter operating income from education fell to $15.4 million, down 73 percent from last year.
The company said in a regulatory filing that Kaplan's revenues and operating results for the rest of 2011 "are expected to continue to be adversely impacted by the move to increase student selectivity," among other factors.
Total operating revenues in the three months ended March 31 declined to $1.06 billion, down 7 percent from the same period last year, while first-quarter net income fell to $15.6 million, down 66 percent from last year.
Losing media operations
The company's flagship newspaper The Washington Post and other print publications incurred a net operating loss in the first quarter. The cable television unit and television broadcasting unit both recorded year-over-year declines in operating income in the quarter.
"We maintain our long-term neutral recommendation on the (company's) stock," Zacks Investment Research reported in early May. Besides the challenges of its education business, The Washington Post Company "faces stiff competition from The New York Times Company (NYT)."
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