The Washington Post Co. reports higher earnings

The Washington Post Co. reported sharply higher earnings in the third quarter of this year, bolstered by cable television profits, political and summer Olympic Games advertising on its local television broadcast stations, and a one-time accounting benefit.

But the company’s flagship newspaper continued to lose circulation and print ad revenue at a steady pace, while revenue and operating income fell at the Kaplan education division.

The company warned that it expected “to incur significant additional restructuring costs” in the fourth quarter and next year at its once-lucrative Kaplan higher education unit, which recently said it was closing or consolidating 13 campuses.

Overall, The Post Co. reported net income of $93.8 million, or $12.64 a share, for the third quarter, compared with a loss of $6.2 million, or 82 cents a share, a year earlier. Revenue for the quarter was flat at $1.01 billion.

But after subtracting discontinued operations, one-time tax benefits and one-time charges such as early retirement and restructuring charges at the newspaper and Kaplan, the company had third-quarter net income of $50.4 million, or $6.79 a share — still more than the net income of $40.9 million, or $5.18 a share, for continuing operations in the third quarter of 2011.

The decline in advertising and circulation was partly offset by a 9 percent drop in newsprint costs in the third quarter.

The Post Co.’s Kaplan education division continued to struggle to comply with Education Department regulations while competing with other firms and institutions. Kaplan higher education revenue fell 17 percent, and its operating income plunged 94 percent, to $1.5 million, in the third quarter. That figure included just $2.1 million of an estimated $18 million in restructuring costs connected to closing or consolidating campuses.

Enrollment in Kaplan University and at Kaplan’s higher education campuses was up from June, but was still down 8 percent from the level of Sept. 30, 2011. The company said that the enrollment declines “reflect weaker market demand over the past year.”

Kaplan’s test preparation unit did better than last year and had 21 percent higher enrollment than it did in the third quarter of 2011. But the company said that enrollment increases “were offset by competitive pricing pressure and a continued shift in demand to lower priced online test preparation offerings.”

As a result of share buybacks, there were 6 percent fewer shares than a year earlier.

The biggest one-time item in the company’s third-quarter earnings this year was a $44.5 million income-tax benefit from the “disposal” of Avenue100 Media Solutions. But the benefit was the result of the unit’s poor past performance. The Post Co. has written off more than $100 million in goodwill and other intangible asset costs associated with the venture, and on July 31 it divested itself of the firm.