Graham Holdings Company Q2 2024 Financial Results

Graham Holdings Company has released its financial results for the second quarter and first six months of 2024. The company, which operates in various sectors including education, healthcare, and automotive, has shown mixed performance across its divisions.

Financial Highlights

For the second quarter of 2024, Graham Holdings reported revenues of $1,185.3 million, a 7% increase from $1,105.0 million in the same period last year. However, the company saw a significant drop in operating income, which fell to $25.9 million from $58.1 million in Q2 2023. This decline was primarily due to goodwill and intangible asset impairment charges at World of Good Brands (WGB) and decreased performance in television broadcasting, manufacturing, and other businesses.

Adjusted operating cash flow (non-GAAP) for the quarter was $98.5 million, slightly down from $100.0 million in Q2 2023. Capital expenditures for the quarter totaled $20.8 million, compared to $22.5 million in the same period last year.

For the first six months of 2024, revenue increased by 9% to $2,337.9 million from $2,136.5 million in the first half of 2023. Operating income for this period was $61.4 million, down from $85.7 million in the first six months of 2023. Adjusted operating cash flow improved to $181.3 million from $171.6 million in the same period last year.

Business and Operational Highlights

Revenue growth was driven by strong performance in the education, healthcare, and automotive sectors. The education division saw a 5% increase in revenue for the quarter, while healthcare and automotive revenues grew by 30% and 18%, respectively. However, the television broadcasting and manufacturing sectors experienced declines of 3% and 14%, respectively.

There were no significant business acquisitions or dispositions during the first six months of 2024.

Strategic Initiatives and Corporate Developments

Graham Holdings repurchased 40,180 shares of its Class B common stock during the second quarter at a cost of $29.5 million. For the first six months, the company repurchased 68,786 shares at a total cost of $49.5 million. As of June 30, 2024, the company had authorization to repurchase an additional 167,617 shares.

The company also reported $19.6 million in net gains on marketable equity securities for the second quarter, compared to $78.6 million in the same period last year.

Management's Perspective

Management attributed the decline in operating income to impairment charges and underperformance in certain business segments. They highlighted the strong performance in the education, healthcare, and automotive sectors as positive indicators for future growth.

Future Outlook

While the company did not provide specific guidance for the next reporting period, management expressed cautious optimism about the continued growth in the education, healthcare, and automotive sectors. They also noted the potential for improvement in the underperforming segments.

SEC Filing: Graham Holdings Co [ GHC ] - 8-K - Jul. 31, 2024