Post 3Q earnings more than triple, shares slide

WASHINGTON (AP) - The Washington Post Co. posted a sharp jump in its third-quarter net income Friday, but growing federal scrutiny of its cash cow, the Kaplan for-profit education business, continues to loom over the company.

Shares slid 4 percent in electronic trading before the market opened.

The Post Co. earned $60.9 million, or $6.84 per share, up from earnings of $17.1 million, or $1.81 per share, a year earlier.

The company, which recently sold Newsweek magazine, relies mainly on its Kaplan business for growth. Kaplan's revenue grew 9 percent during the quarter to $743.3 million and its operating income more than doubled to $99.1 million.

But rising government scrutiny of the recruiting practices of for-profit schools is threatening their profits by making it harder to sign up students and access government-backed financial aid.

In response to tightening regulation, the company said it is launching a program that will let students enroll in classes for four or five weeks before making a financial commitment. If they decide Kaplan is not for them, or if they fail an academic evaluation, they will not have to pay.

Kaplan will likely lose money as a result the program, called "Kaplan Commitment." Had it been in effect since the start of this year, the Post said Kaplan's revenue would have been about $100 million less than the $2.2 billion it made in the first three months of 2010.

The Post said its overall revenue for the three months ended Oct. 3 grew 7 percent to $1.19 billion from $1.11 billion.

Shares fell $15.90 to $368 in premarket trading.