Here’s how the Washington Post covers its namesake parent company’s dismal second-quarter earnings report:
Washington Post Co. second-quarter profit up 13.6 percent
Here’s how everybody else covers the Washington Post’s erns:
Washington Post Profit Drops as Education Business Falters
Washington Post’s Revenue Falls 5%
Education business, fewer print ads hurt Washington Post
Advertising, Circulation Declines at the Post
Washington Post loses $15.9 million in Q2
Only Dow Jones Newswires among major publications emulates the Post‘s house treatment of its earnings:
Washington Post Q2 net up 14% on fewer expenses
Are these just bitter competitors hating on a rival or did the Post (and Dow Jones) gloss its earnings? The latter. So how can one company make a profit in one headline but lose money in another?
The difference comes down to which accounting measure reporters and editors think should be emphasized on an earnings report. The Post goes with net income attributable to common shareholders, which indeed rose 14 percent last quarter. Bloomberg goes with net income from continuing operations, which dropped 29 percent, consigning the Post‘s headline number to the eighth paragraph (Politico is focusing, somewhat confusingly, on the Washington Post newspaper division only, which indeed lost $15.9 million in the quarter).
It turns out the Post Company sold two businesses in the quarter, which accounted for the entire increase in its profit and then some. Bloomberg went with net income from continuing operations because that gives readers and investors a better picture of the ongoing health of the company. You can only sell so many of your assets, after all, and doing so may increase your cash position, but it lowers future revenue and operating profit.
The Post‘s angle would have you believe the company had a good quarter. It did not, which is why Bloomberg et al. are better here. Dow Jones’s piece, meantime, is just misleading. Its lede says that “Washington Post Co.’s second-quarter profit rose 14% as fewer operating expenses masked lower revenue, and the newspaper-publishing and education segments posted weaker results.” Again, the increase in its profit was entirely due to selling two businesses.
The Post’s overall revenue dropped 5 percent, its operating profit dropped 26 percent. Its one-time cash cow Kaplan education division saw its revenue drop 9 percent—worse even than newspapers—and its operating profit fall 84 percent. The paper lost nearly one in ten of its daily readers in the first half of the year. Even its cable TV division didn’t do very well, with sales up just 2 percent and operating profit down 5 percent.
The only division that did well was the Post’s TV unit, which saw sales rise 13 percent and operating profit jump more than a third. Unfortunately, that’s by far the Post’s smallest division and much of that good news was due to cyclical campaign advertising.
If there was good news in newspapers, it’s that digital ads returned to positive territory.
While the Post does point out the continuing operations number in the third paragraph and reports most of the other negative news that or one of the negative numbers should have been the headline. When you’re covering yourself, it doesn’t look good when you’re the outlier on your angle.
The New York Times, meanwhile, was boosted by its digital subscriptions, which the Post refuses to implement. The NYT newspaper saw its revenue rise 2 percent in the second quarter and its division’s operating profit jump 78 percent.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.