Driven by strong backlist sales and a jump in digital audiobook sales, earnings at HarperCollins soared 42% in the quarter ended September 30, over the comparable period a year ago. EBITDA (earnings before interest, taxes depreciation, and amortization) was $68 million for the first quarter of fiscal 2019, up from $48 million in the first period of fiscal 2018. The profit gain came on a 4% rise in revenue in the quarter, to $418 million.
Asked in the conference call discussing the results about the huge improvement in profits, Susan Panuccio, CFO of parent company News Corp, said much of the gain was due to strong backlist sales led by The Subtle Art of Not Giving a F**k and The Hate U Give. Backlist sales contributed 55% of total revenue in the most recent quarter, Panuccio noted. Overall, sales were led by a better-than-expected performance in the U.S., Panuccio added.
Digital audiobook sales also had another great quarter, up 55% over the first period of fiscal 2018. The growth in audio offset soft e-book sales, resulting in a 12% increase in total digital sales in the quarter; e-book and digital audio represented 22% of total HC revenue in the period.
In the conference call, News CEO Robert Thomson said he is optimistic about the prospects for digital audio sales around the world. He said HC “is in discussions with several Chinese audio publishers who are also experiencing express growth in their market, which has been complicated in the past by a lack of IP protection and the proliferation of piracy. There has obviously been a fundamental shift in listening habits not just in the U.S., but around the world.” No one at HC was available Thursday morning to provide more details on what type of discussions HC is having with the Chinese publishers.
For the current quarter, Panuccio said HC has high hopes for the just-released title Homebody by Joanne Gaines, as well as for The Next Person You Meet in Heaven by Mitch Albom, and Justin Timberlake’s Hindsight & All The Things I Can’t See in Front of Me.