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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.
Revenue by Segment
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.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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