Lagardère (LGGDF), the parent company of the Hachette Book Group, may have been buoyed for years by the phenomenal sales of Stephenie Meyer's novels, but as I noted in an article on DailyFinance last fall, that euphoric feeling wasn't going to last forever, and Lagardere said as much with a cautious earnings guidance for the first part of 2010.
Now the company has reported its quarterly earnings for the period ending March 31, and as it expected, there was a decline due to what they termed "the expected erosion in Stephenie Meyer sales", which accounted for a quarter of the 2009 first-quarter figures. Sales for the most recent quarter were 433 million euros ($551 million) , a 6.5% drop from this point in 2009. Adjusting the figures on a "like for like" basis, sales declined 5.9% compared to 12 months ago, but were up 7.4% compared to the first quarter of 2008.
Lagardère had more reason to cheer about its digital books, which accounted for 8% of total first-quarter sales in 2010. These 'bouyant" figures will no doubt increase in the second quarter, and the company is already celebrating that four of the top eight bestsellers on the iPad (AAPL) are published by Hachette divisions: David Baldacci, Scott Turow, James Patterson and Malcolm Gladwell. Looking ahead to the rest of the year, expected increases in digital book sales and the forthcoming release of Meyer's newest book, The Short Second Life of Bree Tanner, have the company in good spirits.
On the magazine side, Lagardère reported 407 million euro ($517 million) in revenue, up 1.9% from this time last year (and up 0.5% on a like-for-like basis), after a 16.2% fall in the fourth quarter of 2009. The company pointed to "the first signs of recovery in the advertising market and a slight improvement in magazine circulation revenues," though it's worth noting that recovery signs translated into advertising revenues being "virtually flat" in the first 3 months of 2010. But stability now might portend an uptick in ad revenue for the rest of the year, which is why Lagardère has "greater confidence" of more good news.
Overall, Lagardère saw a 1.5% drop in revenues, or 3.1% on a like-for-like basis, but CEO Arnaud Lagardère felt cautiously optimistic. "Thanks to the diversity of our business mix and the strength of our brands, we have been able to take advantage of the first signs of recovery, as our 2010 first-quarter revenue figures show," Lagardère said in a statement. "Despite an unstable economic climate, current trends are encouraging. If they are confirmed over the coming months, we do not rule out revising our 2010 full-year guidance upwards."
See our latest post on Stephenie Meyer book sales.
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