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Mar 31, 2020
Graham Holdings Q1 2020 Earnings Report
Reported a net loss due to the COVID-19 pandemic and measures to prevent its spread, which significantly impacted the company's first quarter results.
Key Takeaways
Graham Holdings Company reported a net loss attributable to common shares of $33.2 million for the first quarter of 2020, compared to income of $81.7 million for the first quarter of 2019. The COVID-19 pandemic significantly impacted the Company’s first quarter 2020 results, largely from reduced demand for the Company’s products and services. Revenue for the first quarter of 2020 was $732.3 million, up 6% from $692.2 million in the first quarter of 2019.
Net loss attributable to common shares was $33.2 million, or $6.32 per share, compared to income of $81.7 million, or $15.26 per share, for the same period in 2019.
Revenue increased by 6% to $732.3 million, driven by acquisitions and growth in healthcare and television broadcasting, but partially offset by declines in education.
Operating income decreased to $8.1 million, primarily due to lower earnings in education and other businesses, but partially offset by improvements in manufacturing and healthcare.
The COVID-19 pandemic significantly impacted the company's results due to reduced demand, and this adverse impact is expected to continue throughout 2020.
Graham Holdings
Graham Holdings
Graham Holdings Revenue by Segment
Revenue by Segment
Education Revenue
CapyFin.comTelevision Broadcasting Revenue
CapyFin.comManufacturing Revenue
CapyFin.comHealthcare Revenue
CapyFin.com Forward Guidance
The COVID-19 pandemic is expected to continue to adversely impact the Company's revenues and operating results for the remainder of 2020.
Positive Outlook
- Management is taking measures to reduce costs and capital expenditures.
- Kaplan management is developing and implementing initiatives to mitigate the negative revenue impact arising from the COVID-19 disruption.
- Manufacturing businesses are tightly managing expenses and developing cost reduction plans to mitigate lower product demand.
- SocialCode is in the process of developing and implementing cost reduction plans to mitigate the adverse impact of COVID-19 on advertising demand.
- The Company will have sufficient financial resources to meet its business requirements in the next twelve months.
Challenges Ahead
- The COVID-19 pandemic is expected to continue to adversely impact the Company's revenues and operating results for the remainder of 2020.
- Reduced demand for the Company’s products and services is expected to continue.
- Kaplan's revenues and operating results are expected to be adversely impacted for the remainder of 2020, particularly at Kaplan International Languages.
- The postponement of the 2020 summer Olympics and overall reduced advertising demand due to the COVID-19 pandemic are expected to negatively impact advertising revenue and the operating results at the television broadcasting division.
- GHG expects lower revenues from reduced demand for home health and hospice services in the second and third quarters of 2020.
Revenue & Expenses
Visualization of income flow from segment revenue to net income