In its most important period of the year, sales at McGraw-Hill Education rose 9.9% in the third quarter ended September 30, to $1.12 billion, and operating profit increased 16.1%, to $411.1 million. Revenue in the school group rose 11.2%, to $670.8 million, while sales in the higher education, professional and international group increased 8.1%, to $505.1 million.
M-H attributed the improvement in the school group to a strong showing in several adoption states, with the company scoring wins in California and South Carolina for its k-8 science program, in Texas for its 6-8 math program, and in Indiana, Oregon and Tennessee, where the k-5 balanced reading program did well. Gains in adoption territories offset a flat performance in open states and helped the publisher overcome a soft supplemental market.
In the higher education, professional and international group, sales of MHE’s business and economic imprints were up solidly and sales of digital products also increased. Sales of digital products also gave a lift to sales in the professional segment, with M-H noting that sales of iSpeak products gained traction. Launched in April, iSpeak software turns iPods and MP3 players into portable translators with the text appearing on the screen while phrases are simultaneously played through the earphones. Overseas, school sales were strong in Canada and Spain, while higher education revenue was up in Europe, Asia, and India.
For the first nine months of the year, revenue at MHE was up 8.0%, to $2.15 billion, and profits increased 23.4%, to $400.8 million. Although M-H said it expects operating margins in the group to improve for the full year, it said fourth-quarter results in education may not meet last year’s levels because of some market softness.