Dragged by disappointing results in its Kaplan education division, Washington Post Co. reported lower earnings, falling well below Wall Street expectations.



The media conglomerate had net income of $15.2 million, or $1.87 per diluted share, in its first quarter ended April 3, a 67 percent decrease from $45.4 million, or $4.91 per diluted share, in the year-earlier period. The sole analyst was expecting $4.35 per diluted share.



The fall in profit was associated with a drop in enrollment in Kaplan Higher Education, one of the company’s flagship subsidiaries. Fewer students taking Kaplan classes reduced education division revenue to $640.6 million, a 10 percent decrease from $711.4 million in the first quarter last year.

Kaplan’s operating income in the quarter fell 73 percent to $15.5 million, compared with $57.9 million last year.


In the fourth quarter of 2010, Kaplan implemented a marketing strategy in which students who withdraw or are subject to academic dismissal during a risk-free trial have no financial obligation. The subsidiary has also made admissions policy changes to help it comply with the U.S. Department of Education’s proposed crackdown on for-profit colleges such as University of Phoenix, DeVry University and Career Education Corp.



“These changes, along with improving economic conditions and falling unemployment, which generally reduces demand, have resulted in a 48 percent decline in enrollment,” Washington Post Co. management said in its earnings release.



Although Post Co.’s cable television segment reported a 5 percent increase in subscribers, it reported a decline of 11 percent in operating income to $37.7 million from $42.5 million in the first quarter last year. Operating income from the company’s broadcast division fell 6 percent to $19.6 million, compared with $20.9 million one year ago.



Post Co.’s newspaper division posted an operating loss of $12.8 million in the first quarter, compared with a loss of $13.8 million in the same period last year. Revenue from online publishing, primarily WashingtonPost.com and Slate, increased 8 percent to $25.7 million, compared with $23.7 million in the first quarter last year.



In April, Post Co. launched Trove.com, a personalized news website that uses algorithms to organize stories based on user activity and the latest headlines.

The sole analyst is expecting Post Co. to earn $5.91 per share for the second quarter, compared with actual diluted earnings per share of $10 in the same period last year.



The company’s stock closed Friday at $412.30, down $20.26.