Mixed First Quarter for MHC
Jim Milliot -- Publishers Weekly, 4/26/1999
Weak results in the McGraw-Hill Cos.' home-study operation, Continuing Education Center (CEC), dragged down sales in MHC's educational and professional publishing division for the first quarter ended March 31, 1999. Sales in the group rose 0.3% to $209 million, and the group's operating loss increased to $43.8 million from $39.7 million in the first quarter of 1997.MHC attributed the higher loss to increased investments in its education business as well as to provisions associated with the company's decision to phase out the CEC division. The company reported that it will honor existing contracts with CEC students but is not pursuing any new business. A spokesperson said MHC's continuing education efforts will now be geared toward electronic delivery of information through its Lifetime Learning group.
Elsewhere in the division, the professional book group had solid results in the quarter, led by computer, business, scientific, technical and medical titles. International sales were mixed, with softness in Asia and Europe offsetting gains in Canada and Mexico.
In MHC's annual report, it noted that although sales in the professional group fell 4.8% (News, Feb. 1), the unit had strong growth in the trade/retail sales channel. An increase in computer-book output as well as higher sales through online retailers helped push revenues in the trade area. The company is anticipating continued strong sales in trade and online channels in 1999.
Book Clubs Phased Out
While the company looks to expand its retail sales opportunities, it has shut down its book-club unit. MHC began phasing out its 12 clubs last September, and all are now closed. The MHC spokesperson explained that the clubs were eliminated to allow the company to focus its efforts on business with more potential for growth.
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