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McGraw-Hill Profit Rises 18%
NEW YORK -- McGraw-Hill Cos., a major textbook publisher, said Tuesday its second-quarter profit rose 18% on strong results from its financial services and education businesses.
Quarterly profit rose to $195 million, or 51 cents a share, compared with $165.6 million, or 43 cents a share, last year. Revenue rose 17% to $1.46 billion from $1.25 billion. On average, analysts surveyed by Thomson Financial expected earnings of 47 cents a share on $1.41 billion of revenue.
McGraw-Hill, which also publishes Business Week magazine and operates Standard & Poor's Corp., said revenue from its financial services division rose 18.4% to $597.4 million. Operating profit in the business segment rose 20.6% to $258.3 million.
Education revenue grew by 14.8% to $628.6 million, while operating profit rose 25.5% to $71.6 million. Foreign exchange rates contributed $3.4 million to revenue, and slightly boosted operating profit.
McGraw-Hill's information and media services business revenue increased 18.6% to $230.3 million compared to the same period last year. The company's J.D. Power & Associates unit, which was acquired on April 1, accounted for $33.6 million of the revenue increase. However, operating income was slashed by $11.2 million to $13.6 million due to a decline in advertising and acquisition-related charges.
Assets under management in exchange-traded funds based on Standard & Poor's indexes grew by 31.2% to $118.2 million compared to the year-ago period.
The company expects to post double-digit growth in earnings per share from continuing operations in 2005. The expectation includes dilution of eight cents to nine cents from acquisitions during the past two years, and pension plan assumptions -- but excludes the 2004 non-cash benefit of four cents a share from accrued tax liabilities.
Wall Street projects earnings of $2.15 a share on revenue of $5.85 billion.
— Associated Press
Wall Street Journal
2005-07-26
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