News

Houghton Mifflin Results To Miss Earnings Forecast
Staff -- 10/16/00

Houghton Mifflin's stock took a dive earlier this month after the company announced that sales and earnings for the third quarter ended September 30, 2000, would not meet expectations. The company reported that it expects revenues for the quarter to be up 4% over last year's third period, 10% below what analysts had projected, and that earnings per share would top out at $3.40, compared to earlier earnings per share estimates of $3.96.

Company chairman Nader Darehshori attributed the shortfall to a number of factors. Sales of the company's reading and science programs to elementary schools in open territories were lower than forecast, and sales of the science program were below expectations in California. In fact all elhi sales to California, while higher in the quarter than 1999, were less than expected in July. HM was also hurt by lower than expected sales of its high school Spanish language program and lower than anticipated sales of college materials to the high school advanced placement market.

Darehshori noted that although fourth-quarter sales are now expected to exceed the initial forecast and be in the $180-million to $185-million range, the increase will not be enough to offset the shortfall in the third quarter. For the full year, Darehshori said, revenues should top $1 billion for the first time, and earnings per share will be in the $2.22-$2.27 range, approximately 35% higher than last year's figures, but below analysts' estimates of $2.79 per share.

HM's stock price closed at $34.44 per share on October 11, down from a 52-week high of $51.81.