McGraw-Hill Books Quarterly Profit after Tough 2009
Division by division, the news is still good, though more tempered compared with the overall company picture. Revenue for the education side climbed 1.5% to $317.2 million compared to a year ago, though there was still an operating loss of $61.8 million (19.3% less than last year).
Higher education fared much better, rising 8.3% to $205.7 million, thanks to "surging sales of digital products" like e-books, online courses and online homework management assessment products for students. But School Education Division sales fell 9% to $112 million, as "a modest gain in the instructional materials market was offset by a decline in the testing market."
On the financial services side, first-quarter revenue increased 9.3% to $667 million and operating profit grew by 12.3% to $260 million, boosted by the performance of Standard & Poor's Ratings Services unit, whose revenue jumped 15.4% to $451.5 million. The news only partly offsets S&P's continuing troubles as it remains in the crosshairs over its contributions to the nation's credit crisis.
In a statement, CEO Harold McGraw III (pictured) pointed to "recovery in global bond markets, solid results in U.S. higher education, which is benefiting from double-digit growth in digital products and services, and an outstanding performance in global energy information markets" as major factors in the company's Q1 performance and operating margin expansion. But he also pointed out that the first quarter is the company's smallest, and looking ahead, "until we get greater visibility on trends in our key markets, we are maintaining our original guidance for 2010. We still expect diluted earnings per share of $2.55 to $2.65 for the year."