Sales Fall at McGraw-Hill Education, but Loss Cut

by Jim Milliot -- Publishers Weekly, 4/28/2009 7:24:00 AM

Revenue at Mc-Graw-Hill Education fell 5.3% in the first quarter ended March 31, to $312.6 million, but the company was able to cut its quarterly operating loss from $90.9 million to $76.6 million. Parent company McGraw-Hill Cos. credited the smaller loss to tight cost controls; the company eliminated several hundred positions in 2008.

The strong dollar reduced revenue at MHP, particularly in its higher education/professional/international group where revenue declined 0.7%, to $190 million. Higher enrollments led to solid gains in domestic college sales, but currency fluctuations hurt international sales and weak retail demand in the U.S. offset those gains. MHE reported double-digit increases for digital products in both the higher education and professional markets.

 Revenue in the school group dropped 11.6%, to $122.6 million. Softness in residual demand for basal textbooks and for supplementary materials was blamed for the decline, along with a disappointing performance in the North Carolina math adoption.

 MHE did not update its guidance for the remainder of the year, but parent company MHC said it expects total sales for the company to decline 4% to 5% compared to an earlier prediction of a 1% to 2% drop, although it still expects earnings per share to fall between its original forecast. Total revenue at MHC was down 5.7%, to $1.1 billion, and net income fell to $63 million from $81.1 million in the quarter.