Earnings Soar at HC
by Jim Milliot -- Publishers Weekly, 5/20/2002
Operating income jumped 83% to $22 million, on a 15% sales increase to $242 million, at HarperCollins for the third quarter ended March 31. "We sold lots of copies of lots of books," HC CEO Jane Friedman said. She credited the dramatic earnings gain to "putting the right books in the right places.... I trust the people who manage the supply chain to know what books belong where, and they haven't disappointed me," Friedman told PW. Improved inventory management also helped to lower returns in the quarter.
In the U.S., revenues were up 10% and profits 96% in the general books group, while sales in the children's group rose 18% and profits jumped 57%. The two groups placed a total of 36 titles on the New York Times bestseller list in the quarter, including eight Lemony Snicket books. In addition to Snicket, The Princess Diaries did very well, and the children's group had a strong performance from its backlist as well. At Zondervan, revenues increased 10% and profits 26%. Margins at Zondervan and the children's group are both "very strong," Friedman noted.
Friedman said the fourth quarter has started out "brilliantly," and predicted that HC "will finish the year right where I thought we would." The strong third quarter helped to offset a soft first period, and for the nine months ended March 31, operating income was up 3%, to $105 million, with sales up 3.5%, to $844 million.
