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.