With litigation and settlement costs connected to the various e-book pricing cases behind it, profits at Simon & Schuster rose 20% in the first quarter ended March 31 compared to a year ago, despite a 3% decline in sales. Operating income before depreciation and amortization hit $12 million in the quarter, while sales fell to $171 million from $176 million. In addition to lower legal costs, the bottom line benefitted from higher sales of more profitable e-books. Digital book sales increased 14% and represented 30% of total revenue for the first quarter, compared with 26% in the first period of 2012.

S&S's children's division had the best performance in the quarter, CEO Carolyn Reidy told PW, pointing to strong sales of two books by Cassandra Clare, Clockwork Princess and City of Lost Souls. "Her audience keeps getting bigger and bigger," Reidy said. Sales in the adult group were down, hurt by strong sales last year of the Steve Jobs book and 11/22/63. Strong sellers in the quarter included Proof of Heaven by Eben Alexander and The Storyteller by Jodi Picoult.

The growth in digital, Reidy noted, was strongest in its international markets and young adult, with sales of adult fiction, which had been driving e-book sales to this point, growing at under the 14% companywide average. Reidy said S&S is not seeing the fall off in print sales of popular authors that had occured the last couple of years and believes the print and digital markets "are coming toward an equilibrium. Print sales are holding on."

The solid first quarter was achieved while S&S continues its standoff with Barnes & Noble over terms. Reidy said the two companies are still in discussions to resolve the dispute, but that no agreement has been reached. She said she feels sorry for the authors whose books have been affected by the disagreement, and added that S&S appreciates the support it has received from the author community.

Reidy said she is optimistic about prospects for the year. In the second quarter, S&S has high hopes for The Center Holds by Jonathan Alter, Happy, Happy, Happy by Phil Robertson and The Silver Star by Jeannette Walls.