Washington Post Co., the publishing group part-owned by billionaire Warren Buffett, said second-quarter profit fell 29 percent after revenue from its education business declined.
Net income from continuing operations dropped to $34 million, or $4.48 a share, from $47.6 million, or $6, a year earlier, the Washington-based company said today in a statement. Sales fell 5.1 percent to $1 billion.
The company’s Kaplan unit has come under government scrutiny -- along with the rest of the for-profit education industry -- and faces increasing regulation. The Washington Post newspaper also is struggling. It doesn’t charge online readers and needs to boost revenue, said Ken Doctor, a Santa Cruz, California-based analyst at Outsell Inc., at research firm focused on the publishing industry.
“Print circulation is on a rapid decline at the Post,” Doctor said before today’s earnings report. “They need to become less of a newspaper company and much more of a digital news company and a digital advertising company.”
For the first six months of 2012, Post daily and Sunday circulation declined 9.3 percent and 6.1 percent, respectively, compared with a year earlier. Average daily circulation at The Washington Post totaled 482,100 and Sunday circulation was 699,900, according to the statement.
Online-publishing revenue, which primarily includes Washington Post and Slate digital advertising sales, rose 8 percent to $26.3 million in the quarter compared with a year earlier, the company said.
The company recorded $8.4 million in restructuring charges at the Kaplan education and newspaper units. Revenue in the education division dropped 9 percent to $558.4 million in the quarter.
Advertising sales at the company’s flagship newspaper declined 15 percent to $56.7 million, as the broader industry continues to suffer declines in print advertising. To create new sources of revenue, the company has been working to develop digital technology, such as social-marketing tools, through its research and development unit WaPo Labs, Doctor said.
Profit attributable to common shareholders rose 14 percent to $51.8 million or $6.84 a share, from $45.6 million or $5.74 a share a year earlier.
Washington Post said on July 31 it sold Avenue100 Media Solutions to a management group. It didn’t disclose terms for the sale of the marketing firm, which it acquired in 2007.
Buffett’s Berkshire Hathaway Inc. is the company’s largest shareholder, with a 27 percent stake, according to data compiled by Bloomberg.
Washington Post shares fell less than 1 percent to $330.29 at the close in New York. The stock has declined 12 percent this year.