Financial results from a number of publishers for the period ending June 30, 1999, indicate that the publishing industry had a solid first half of the year. Second-quarter sales for Houghton Mifflin, McGraw-Hill Educational and Professional Publishing, Tribune Education and the Penguin Group, as well as third-quarter results from IDG Books, rose 7.4% to $726.7 million over the similar period in 1998, while operating income increased 11% to $83 million. Six-month operating earnings rose 173% to $44 million on a 8.2% increase in sales to $1.59 billion.
Houghton Mifflin reported an 8.9% increase in second-quarter sales to $220.9 million, while operating income fell slightly to $22.6 million. The largest gain came from HM's K-12 publishing division where sales increased 10.4% to $178.1 million. College sales were up 2.8% to $21.9 million, and the "other"segment saw sales increase 3.7%, mainly due to higher sales of adult trade and children's titles. For the first six months of the year, sales were up 11.2% to $305.2 million, while the operating loss moved up to $32.2 million from $30.5 million. HM chairman Nader Darehshori said, "Based upon our progress to date... we believe that we will achieve current earnings estimates for 1999."
Second-quarter sales at MHC's book publishing group rose 4.8% to $371.1 million, and net income was up 16.3% to $41.3 million. Sales in the K-12 segment were led by gains at Glenc /MH, the company's secondary school publisher. Sales were also up in the college division and the professional book group. International publishing operations had good results with improvement in Mexico and Europe and the beginning of recovery in the Asia-Pacific markets. Six-month sales in the publishing group rose 3.1% to $580.0 million, while the operating loss was cut to $2.6 million from $4.3 million.
Tribune's education publishing group reported a 9.8% increase in operating profits to $14.6 million on an 8.8% gain in sales to $93.2 million for the second quarter. The improvement was led by sales of math and language arts materials. In the six months, revenues rose 8.2% to $157.4 million and operating income was up 7.1% to $13.5 million.
Six-month sales at the Penguin Group rose 11.2% to $426 million, while operating profits increased 86.4% to $55 million. Penguin Group chairman Michael Lynton told PW the results were up "across the board"at the company's Penguin Putnam subsidiary. He attributed the huge gain in profits to continued cost savings from the Penguin/Putnam merger as well as the company's success in taking advantage of global distribution synergies.
Meanwhile, sales at Pearson's other publishing division, Pearson Education, rose 207% to $897 million due mainly to the acquisition of Simon & Schuster's education group. (Because of the inclusion of S&S, PW has excluded Pearson Education from year-to-year comparisons). The operating loss increased to $61 million from $31 million. According to Pearson, the education group is "on track"to meet its first full-year profit expectations. The biggest gain in the first half occurred in the U.S. higher educational and professional group, where sales rose 358% to $304 million. Revenues in the U.S. school publishing group increased 216% to $317 million, while international sales increased 201% to $275 million.
Third-quarter revenues at IDG Books rose 21% to $41.5 million led by a 25% gain in the company's branded franchise group, which includes For Dummies and the recently acquired Cliffs Notes. Sales in the technology group rose 15%. For the first nine months of the fiscal year, operating profits were up 18.2% to $10.4 million on a 17.3% increase in sales to $123.5 million.
Although it d s not break out book revenues, Time Warner reported that its trade publishing group had a good second quarter, although its gains were somewhat offset by lower results at Book-of-the-Month Club.