Newspaper companies have themselves been in the news lately, as recent reports continue to confirm the inevitable defection of many morning paper readers to online news sources. Of course, this is nothing new, as nationwide circulation figures have been on the downswing for quite a while now.
The latest news: Circulation figures are falling at the fastest clip in more than a decade. This, coupled with an uneven recovery in advertising spending, does not paint a bright picture for newspaper publishers.
None of this prevented media giant Washington Post (NYSE:WPO) from posting double-digit gains in both revenues and earnings this morning. First-quarter net income (including one-time gains) increased 12%, to $66.6 million ($6.87 per share) on revenues that climbed 10%, to $833.9 million. Aside from magazine publishing -- which was hurt by a 22% plunge in advertising revenues at Post-owned Newsweek -- each of the Post's segments reported solid top-line growth.
Revenues from the firm's core newspaper publishing operations rose 6%, to $233 million, though a sharp increase in newsprint expenses weighed on operating income. Like last quarter, online publishing continues to lead the way, as revenues generated by the Internet version of the firm's flagship Washington Post newspaper spiked 27%, while those from its traditional black-and-white counterpart inched up only 2%. The results compare favorably with industry-leader Gannett (NYSE:GCI), whose first-quarter newspaper revenues came in 4.3% higher.
Elsewhere, Washington Post reported mixed results from its cable business. During the quarter, cable revenues rose 4% to $126.4 million, as a modest rate increase helped offset a 2% drop in the number of basic subscribers. The company also shed a few digital cable subscribers, and it has currently signed up just under one-third of its basic cable customers for upgraded digital video. By comparison, Time Warner (NYSE:TWX) has a penetration rate of around 45%. However, some 50,000 cable modem customers have been added since this time last year.
The Post's education segment has primarily driven results in recent quarters, and this time is no exception. The Kaplan subsidiary -- which covers all facets of education, from grade-school learning programs to test-preparation materials to graduate-degree programs -- has overtaken newspaper publishing as the Post's top revenue producer. For the quarter, the segment posted a 58% surge in operating income, on revenues that jumped 26% to $325.4 million.
Washington Post has evolved into far more than a traditional newspaper publishing company, and that diversity was reflected in this morning's results. Investors who have their eye on the news may just want to peruse the Post.
Catch up on yesterday's news with these:
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Fool contributor Nathan Slaughter owns none of the companies mentioned.
