HarperCollins and Harlequin Report Better Earnings
HarperCollins didn't figure much in the first-quarter earnings call of its parent company, News Corp., as CEO Rupert Murdoch spent a substantial amount of time discoursing on The Wall Street Journal's new section devoted to all things New York City and celebrating News Corp.'s overall revenue increase to $8.8 billion -- a 19% climb from this time last year. But the book publisher continued to recover from 2009's dismal fortunes, reporting a 13.5% increase in sales to $276 million for the period ending March 31. Operating income was also in the black at $4 million, compared to an $8 million loss a year ago.
In a statement, the company pointed to "higher sales at the General Books and the Children's divisions," strong sales of Game Change by John Heilemann and Mark Halperin, Sweet Little Lies by Lauren Conrad, and the mass-market edition of Hero at Large by Janet Evanovich, as well as 61 books on The New York Times bestseller list -- including eight in the No. 1 slot.
By contrast, romance publisher Harlequin's first-quarter earnings report was a bit of a contradiction. For the period ending March 31, sales were at $113 million, down more than 9% from last year's revenue of $124.5 million. EBITDA (operating profit), however, rose 9% to $23.7 million.
Approximately $10 million of the earnings drop was directly attributed to the strength of the Canadian dollar, which has been hovering close to par with the American dollar, but Harlequin anticipates a "relatively stable" outlook for the rest of 2010 thanks to expected growth in North America digital book sales. If the exchange rate remains favorable to Canadian currency, the effect will be to buffer profit, but reduce earnings by as much as $5.5 million over the course of the year.