While parent company CBS ended 2009 with a modest 1% dip in sales, the same could not be said for its book publishing arm Simon & Schuster. For the fourth quarter ending Dec. 31, S&S reported sales of $220 million, a 10% drop (or $25 million) from the previous year, and profits of $13.6 million, more than half as much ($28.5 million) the company earned in 2008. For the full fiscal year, sales of $793.5 million declined 7.5% compared to a year ago and profit was a paltry $50.2 million -- a 43% drop from $88.2 million in 2008. S&S's operating income was $11.9 million for the fourth quarter, and $42.5 million for the year.Despite the "soft retail market" and "the unfavorable impact of foreign exchange rate changes" the company pointed to bestselling fourth-quarter titles including Under the Dome by Stephen King and It's Your Time by Joel Osteen, as well as the year-long success of Glenn Beck's Arguing with Idiots. S&S also said its revenue decline and higher royalty expenses were offset by "lower production costs, as well as lower operating expenses resulting from cost-savings initiatives."
In a statement to industry newsletter Publishers Lunch, CEO Carolyn Reidy further elaborated that "lower sales, lower distribution client fees, lower sub-rights income (due in particular to the earlier success of The Secret) and royalty write-offs are what bedeviled us all year." The publishing company's hoped-for "big holiday rebound" didn't come to fruition. Some titles like Audrey Niffenegger's Her Fearful Symmetry, which didn't come close to earning out the reported $5 million imprint Scribner paid for it, also underperformed.
As always, there are higher hopes for 2010. Reidy expects S&S "to have a significantly healthier year in terms of operating income" even with reduced bookstore traffic and sales. E-books accounted for 4% of S&S's total book sales and Reidy believes that number will more than double even before taking into account "new players in the market."
Update: This post corrects an earlier version, which misstated the percent profit decline in 2009. S&S reported a 43% drop in profits for the year, not 57%.
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