McGraw-Hill (MHP) reported its fourth quarter earnings Tuesday morning, and the results handily beat Wall Street expectations. Profits rose 45% to $167.3 million, or 53 cents a share, compared to $115.92 million or 37 cents per share in the same quarter last year. That exceeded analyst predictions of 40 cents a share. Earnings included a pre-tax gain of $10.5 million, or 2 cents per share from the company's sale of BusinessWeek to Bloomberg in December.Overall revenue rose 3.3% to $1.46 billion, up from $1.42 billion in the year ago quarter and in excess of the $1.40 billion predicted by analysts. Standard & Poor's Credit Market Services' revenue increased 19.4% in the fourth quarter to $473.4 million and slipped by 0.4% to $1.7 billion in full year 2009 compared to 2008.

Breaking things down by category, education sales rose 2.6% to $520 million, with operating profit of $33.5 million (compared to a loss of $12.7 million a year ago.) But for the year education sales were still down 9.5%, at $2.4 billion. School education sales decreased 7.6% but the higher education, professional and international group increased 7.5% for the quarter, which the company attributed to "a surge in second semester ordering in the U.S. college and university market and improved performances in professional and international markets." And the K-12 market "started improving in September" after "declining steadily during the first eight months."

"Continued recovery in the corporate new issue market here and overseas at Standard & Poor's Credit Market Services and an upswing in higher education, professional and international markets enabled us to finish 2009 positively and set the stage for more growth in 2010," said Harold McGraw III, chairman, president and CEO, in a statement. "Increased revenue and tight cost controls contributed to substantial improvement in our operating margin in the fourth quarter compared to the same period last year."

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