After a strong financial run that began last August with the purchase of Harlequin, HarperCollins had a rough quarter in the period ended September 30. EBITDA at the publisher dropped 24% in the period, to $42 million, down from $55 million in the quarter a year ago.
Sales in the quarter, which is the first period of the fiscal year, rose 1%, to $409 million. Adjusted revenue, which excludes $25 million from the Harlequin acquisition partially offset by $15 million in currency fluctuations, fell 2%; adjusted EBITDA was down 33%.
Parent company News Corp blamed the weak sales performance on lower sales of the Divergent series, and lower e-book sales for the publisher as a whole. A bright spot was the U.S. general books segment, which gained from sales of Go Set a Watchman. Digital sales, which includes both e-books and digital audio, represented 20% of revenue in the quarter ($82 million). E-book sales alone accounted for 22% of revenue in last year’s first quarter ($89 million), while all digital sales represented 23% of sales ($93 million).
In the conference call discussing the quarterly results, News chief executive Robert Thomson the company is "watching closely" the softening e-book sales trend in the U.S.