Earnings Jump 56% At HarperCollins
Jim Milliot -- 11/13/00

HarperCollins, which had large gains in sales and profits in fiscal 2000 ended June 30, continued its strong run into the first quarter of fiscal 2001. The company reported that for the period ended September 30, 2000, operating income jumped 56.2%, to $50 million, with a revenue gain of 17.0% to $337 million. HC's ability to drive earnings well ahead of sales pushed its operating margin in the most recent quarter to 14.8%, compared to 11.1% in the first quarter of fiscal '00.

HC president Jane Friedman said the margin improvement was due to the company's ability to market aggressively while watching costs. All of HC's divisions posted gains in the quarter, led by the general books group, which doubled profits in the quarter, and children's publishing, where profits increased by better than 50%. Revenues at Zondervan increased 17% in the period, and earnings rose 36%. HC also benefited from its new back-office distribution agreement with Scholastic that went into effect July 1 (the first major title to be billed under the agreement was Harry Potter and the Goblet of Fire). Friedman said HarperCollins U.K. had a strong period, with sales up 7% and earnings ahead 20%; results were helped by the purchase of Fourth Estate.

In addition to having 28 books hit the New York Times bestsellers list, Friedman noted that the new Barbara Kingsolver title, Prodigal Summer, shipped in the first quarter and not in the current quarter as originally planned. "I'm very happy to deliver these results," Friedman said.

In a couple of post-quarter developments, HC has concluded its acquisition of approximately 300 titles from the bankrupt Element Books. HC will not accept returns of any Element books anywhere in the world until after March 1, 2001. Friedman also said that Viacom's pending acquisition of BET will have no affect on HC's plans to launch a books channel and African-American bookstore on (News, Oct. 23).