The Washington Post reported that its third-quarter earnings plummeted 86 per cent compared with the same period last year, citing a writedown in the value of several of the Post's newspapers asset, a huge goodwill impairment charge and a decline in circulation and print advertising revenue at its flagship paper.
It said revenue rose 10 per cent to $1.13 billion during the quarter, from $1.02 billion during the same period last year and a net income of $10.3 million, or $1.08 per share, for the third quarter ended September 28, compared to net income of $72.5 million, or $7.60 per share, for the same period last year.
Its net profits for the first nine months of 2008 was $46.9 million compared with $205.7 million for the same period of 2007.
Losses of $59.7million, which was due to goodwill impairment charge at the company's several community newspapers which includes The Herald and the Post brought down its entire newspaper division causing an operating loss of $82.7 million for the quarter.
The company also had to underwrite $12.5 million in accelerated depreciation related to the closing of its College Park printing presses.
Circulation and print advertising revenue has taken a hit with most of the newspapers in the US and Washington Post was no different with a reported decline of 7 per cent to $196.2 million but its online publishing revenue grew by 13 per cent.
Revenue saw a growth at the education and cable television divisions as also a small rise at the TV broadcasting division and its educational subsidiary, Kaplan, which accounts for 53 per cent of the company's revenue, saw a 17 per cent increase from last year with $603 million.
With the ongoing financial crisis and the trend changing to read news and classified ads on the internet for free, instead of paying for a newspaper, many newspapers are feeling the heat and started cutting costs with the Sun slashing 100 jobs in August this year and Tribune cutting hundreds of jobs at all its newspapers, including the Times and its flagship Chicago Tribune. (See: L A Times parent draws $250-million credit amidst financial crisis; ends AP feed deal)
Tribune Co, the US newspaper publisher and broadcaster, declared $4.5 billion Q2 loss on declining ad revenues which dropped 15 per cent and struggling under a $13 billion debt load, borrowed $250 million from an existing $750 million secured revolving credit facility and gave notice to end its contract with the Associated Press as the newspaper tries to cut costs accompanied by the ongoing world financial crisis.(See: Tribune publisher declares $4.5 billion Q2 loss on declining ad revenues)
The New York Sun, which started publication six years ago as a conservative alternative to the New York Times, employing more than 100 people, closed down in October as it failed to raise capital which was needed to extend the newspaper's life after losing an estimated $1 million a month. (See: The New York Sun newspaper winds up)
The Los Angeles Times also cut 75 editorial jobs this week.