After a Bruising Year, McGraw-Hill Faces a Tough Fourth Quarter

McGraw-Hill (MHP) is coming off a tumultuous year that saw CEO Harold McGraw III (pictured) execute the sale of BusinessWeek to Bloomberg and a major corporate reorganization (with lost jobs for hundreds of employees). On the plus side, McGraw-Hill's Standard & Poor unit started slowly coming out of a funk, thanks to small improvements in debt markets. Now, McGraw-Hill is set to report its fourth-quarter earnings before the market opens on Tuesday.The company's K-12 education division took the biggest toll on third-quarter earnings, which saw division sales drop 11.6% to $1 billion and operating profit fall 16% to $298 million.

As a result, analysts are expecting something of an uphill battle for McGraw-Hill's fourth quarter. According to First Call, the consensus fourth-quarter earnings per share (EPS) estimate for the global information services provider is 40 cents a share (on a 1.1% overall decrease in revenue). For the full year of 2009, the EPS estimate is $2.26 (a 7.3% drop). First Call also expects McGraw-Hill to earn 25 cents and $2.56 a share for first-quarter 2010 and fiscal 2010, respectively.

On Jan. 20, in a bid to return more capital to shareholders, McGraw-Hill increased its regular quarterly cash dividend on common stock to 23.5 cents a share, a 4.4% jump and the 37th consecutive annual increase. The new dividend payout, which goes into effect on March 10, is part of a 17.1 million share repurchase program initially approved in 2007. The program had been halted a year ago to preserve capital.
Read Full Story

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.