With the separation of McGraw-Hill Education from the rest of the company still on track to take place before the end of the year, McGraw-Hill Cos. this morning reported that for the second quarter ended June 30 sales at MHE declined 12%, to $474 million, although operating profit, benefiting from “restructuring actions and ongoing tight expense management,” rose 36%, to $57 million.
The biggest decline in the quarter came in the school education where revenue decreased 20% to $233. MHC didn’t have much optimism for the rest of the year either, reporting that adoption opportunities for 2012 “offer the lowest revenue potential for publishers in many years.” As a result, MHC said its school group “anticipates an overall reduction of 10% in the K–12 market this year, which represents the lowest spending level in over a decade.”
Results were better in the higher education/professional/international group, though revenue decreased 2%, to $241 million. Gains in higher education were offset by declines in I\international revenue, predominately related to the strong U.S. dollar, MHC said. In the professional division, digital materials accounted for 34% of revenue in the quarter, including a 33% sales gain in digital subscription platforms.
For the first half of 2012, revenue at MHE was down 8%, to $770 million, although the operating loss was cut to $8 million from $33 million.