Submitted by Fox First at Ten on September 20th
NEW YORK (AP) - Standard & Poor's cut the credit rating of the Washington Post Co. to "BBB" on Thursday, citing deteriorating performance at its Kaplan education unit and continuing declines in newspaper advertising revenue.
S&P said the outlook for the rating is "negative," and noted that the company faces risks in stabilizing both its businesses.
The ratings agency said the company has experienced "sharply negative" trends in student enrollment and profitability since 2010 as a result of regulations that restrict its ability to market its services.
The company is also trying to revise the way it does business to reduce student loan default rates, which have contributed to lower enrollment the at the Kaplan test preparation and distance learning unit.
At "BBB", the company's long-term rating is one notch below the previous "BBB+" rating. It is two notches above junk bond status.
Last month, the Washington Post reported second-quarter net income rose 14 percent to $51.8 million, or $6.84 per share, while revenue fell 5 percent to $1 billion.
Washington Post shares were down $2.49, or less than 1 percent, at $360.68 in late trading Thursday. Shares have traded in a range between $308.50 and $405 in the last year.
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