Image source: Kaplan University.

Graham Holdings (NYSE:GHC) reported second-quarter results on Aug. 3. The media conglomerate formerly known as The Washington Post Co. also operates the Kaplan brand of educational services, makes industrial tools, and runs a network of home healthcare providers.

Graham Holdings' Q2 results: The raw numbers


Q2 2016 Actuals

Q2 2015 Actuals

Growth (Year over year)


$628.9 million

$680.9 million


Net Income From Continuing Operations

$60.8 million

$39.3 million


GAAP EPS (diluted)




Source: Graham Holdings.

What happened with Graham Holdings this quarter?

The results above do not include $18.5 million million in Q2 2015 net income that was generated by what now are classified as discontinued operations. These businesses include a school in China that used to belong to Kaplan International, as well as regional cable operator Cable ONE, which was spun off from Graham in 2015.

  • Educational services accounted for the lion's share of Graham's sales, as usual. In the second quarter, this division saw sales decline 20% year-over-year to $419 million while operating income more than doubled to $32.9 million.
  • TV broadcasting brought in revenue of $52.3 million, a 7% increase over the year-ago period. Here, operating income increased 5% to land at $44.2 million.
  • Other businesses reported 72% higher sales, or $118.3 million, but operating losses also doubled to $5.1 million.

Graham Holdings does not provide forward guidance of any kind.

Looking ahead

Graham's Kaplan arm is getting out of the hands-on higher education campus game, having closed campuses and consolidated its workforce since 2012. That sub-segment of Graham's education business reported a measly $266,000 in second-quarter revenue, down from $66.2 million a year earlier. These days, Kaplan University offers bachelor's and master's degrees mostly through online classes.

The decline in education revenue should stop here, since there isn't much more bricks-and-mortar cutting to be done. The strategy shift did boost Graham's operating margins significantly, and the TV broadcasting segment also showed some muscle here.

Anders Bylund has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Cable One and Graham Holdings. Try any of our Foolish newsletter services free for 30 days.

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