Another Bad Quarter at HarperCollins
by Jim Milliot -- Publishers Weekly, 2/5/2009 2:54:00 PM
Revenue at HarperCollins dropped 25% in the key quarter ended December 31, falling to $305 million from $406 million in the comparable quarter in 2007. Operating income plunged 66%, falling to $23 million from $67 million. This is HC’s second consecutive weak quarter and at the midpoint of its fiscal year earnings are down 75%, to $26 million, with revenue off 16%, to $620 million. In a release, parent company News Corp. attributed the poor performance to a weak retail environment and difficult comparisons to a strong showing in the fourth quarter of 2007. The bankruptcy by the U.K. distributor EUK also contributed to the earnings decline.
HC’s weak results were part of a bad quarter for News Corp., which took $8.4 billion in write-downs (none of which applied to HC). News said it was implementing “rigorous cost-cutting across all operations and reducing headcount where appropriate.”
HC CEO Brian Murray was not available to discuss the quarterly results. Spokesperson Erin Crum said that while "some pockets of the company performed well," overall it was a difficult quarter. She said the steep decline in earnings was attributed to the company's fixed costs, costs which the publisher is now trying to reduce. She declined to reveal how many employees accepted HC's voluntary retirement offer made last week; responses were due February 3.
