Publishing News: February 1, 1999
The McGraw-Hill Companies Reports 15% Increase in 1998 Earnings
Internet sales Gain at WH Smith
EarthWeb Announces Online Publishing Deals with Seven Leading Book Publishers
Primedia's 1998 Annual Sales Grow to $1.5Billion
Houghton Mifflin Company Reports 1998 Fourth-Quarter and Full-Year Results
EU Probes FT/Dow Jones/Knight Ridder 1996 deal
Mirror Group CEO is Out
The McGraw-Hill Companies Reports 15% Increase in 1998 EarningsThe McGraw-Hill Companies today reported a 15.1% increase in diluted earnings per share to $3.35 for 1998 compared to $2.91 in 1997. Net income for the year grew to $333.1 million and revenue increased 5.5% to $3.7 billion. Excluding an extraordinary loss and other one-time items, diluted earnings per share were $3.37 and net income was $335.4 million.
Educational and Professional Publishing: Revenues in this segment increased 3.0% to $1.6 billion in 1998 and operating profit improved by 7.7% to $202.1 million. Excluding the write-off for CEC in 1998 and the facilities charge in 1997, operating profit increased 11.1% and operating margin improved to 13.5%. "Revenue in the seasonally slow fourth quarter increased 1.9% to $344.7 million and operating profits climbed by 26.0% to $22.4 million. Despite a lighter adoption schedule in the elementary school market in 1998 and challenging comparisons created by a 25.4% increase in revenue last year, our elementary-high school operations produced a 7.6% gain in revenue to $831.5 million. Outstanding results at Glencoe/McGraw-Hill, our secondary school publisher, SRA/McGraw-Hill, our supplementary publisher, and CTB/McGraw-Hill, our testing division and a better than expected performance by the School Division all contributed to this record. Glencoe produced market-leading performances in math and social studies, scoring well with multi-media programs in both adoption states and open territories. SRA/McGraw-Hill and the School Division combined to take 34% of the California reading market in the second year of the adoption and led the market after two years with a 35% share. The School Division's social studies program also performed well, helping it to overcome a disappointing performance in math. In Higher Education, solid results with both the front and backlists combined to produce a 7.0% gain in revenue to $359.4 million. Revenue for the Professional Publishing Group declined by 4.8% to $429.5 million, reflecting the continuing weakness at CEC. Softness in the Asia-Pacific markets also held back International Publishing operations, although our Spanish-language programs in Mexico and Spain showed solid gains.
Source: Businesswire 1/26/99
Internet sales Gain at WH Smith
British retailer W.H. Smith Group on Wednesday reported a modest sales increase over Christmas and New Year, but saw orders surge at its newly-acquired Internet Bookshop. The Internet Bookshop, the online bookseller Smith bought last July for 8.8 million pounds ($14.54 million), saw sales jump by 70 percent to 1.7 million pounds since September 1 last year, with orders up 170 percent in December. The firm's shares have been swept along on a wave of Internet fever, sparked by investors scouring the UK stock market for Internet plays, which look cheap against U.S. cyber-stocks like rival online bookseller Amazon.com and search engine Yahoo!. Home electronics retailer Dixons, owner of Internet service provider Freeserve, has been the main beneficiary so far. It shares have surged some 70 percent since Freeserve's success first became apparent in November, boosting Dixons' market value by some three billion pounds. Analysts said there has been intense speculation about how Smith might expand its online business, including rumors it might do its own ``Freeserve.'' When Smith bought Helicon it said this marked another step along the way in developing its electronic commerce business and said it would reveal more about Internet plans in the spring.
Source: Reuters 1/27/99
EarthWeb Announces Online Publishing Deals with Seven Leading Book Publishers EarthWeb announced today that it has entered into agreements with seven leading Information Technology (IT) publishers to provide the complete text of their technical books on EarthWeb's ITKnowledge. The deals give EarthWeb licensing rights to over 3,000 technical books for its subscription-based online library of IT information. The ITKnowledge roster of publishers comprises many of the most respected companies in the technical publishing industry including: IDG Books Worldwide and its imprints, M&T Books and IDG Books; Macmillan Computer Publishing and its imprints, Hayden, Macmillan Technical, New Riders, Que, Sams, Waite Group Press and Ziff-Davis Press; The Coriolis Group and its Coriolis and Ventana imprints; Wordware Publishing; CRC Press and its Auerbach and St. Lucie Press imprints; 29th Street Press (formerly Duke Press); and ASP Publishing.
ITKnowledge (http://www.itknowledge.com) is EarthWeb's first subscription service and contains the largest online collection of technical books for IT professionals.
Source: PRNewswire 1/26/99
Primedia's 1998 Annual Sales Grow to $1.5Billion
Primedia reported annual sales rose to $1.53 billion, up 26.3%, and EBITDA, rose 15.6% to $323.1 million. According to company sources the company will strengthen our market positions as we accelerate organic growth through market penetration, international expansion and new products, particularly delivered via the ultimate targeted medium - the Internet." Some of PRIMEDIA's brands include Seventeen, HPC Apartment Guides, Horticulture, IntelliChoice, Telephony, Channel One Network and Weekly Reader. During the week there was some media speculation which referred to Primedia as a potential acquition target. The management group which sold Petersens have loads of cash and will apparently be looking to repeat their success.
Source: Businesswire 1/28/99
Houghton Mifflin Company Reports 1998 Fourth-Quarter and Full-Year Results Houghton Mifflin Company today reported results for the fourth quarter and full year 1998. Net sales in 1998 reached a record $861.7 million for the full year compared to $797.3 million in 1997, an increase of 8.1%. Income from operations was $40.8 million, or $1.40 per fully diluted share, compared to $42.7 million, or $1.48 per diluted share, in 1997. The 1998 results included $.07 per share of operating losses attributable to the Company's July 1998 acquisition of Computer Adaptive Technologies, Inc. and a $.02-per-share charge for the cost of the Company's unsuccessful bid for a portion of Simon & Schuster's publishing assets. Net income for 1998 was $63.6 million, or $2.19 per fully diluted share. This result included other earnings related to the Company's investment in INSO Corporation (INSO) totaling $28.4 million after tax, a $2.0 million after-tax loss on the disposition of certain long-term investments, and a $3.5 million charge for in-process research and development. Net income in 1997, including special items related to INSO totaling $7.2 million, was $49.8 million, or $1.73 per fully diluted share.
Source: Businesswire 1/28/99
EU Probes FT/Dow Jones/Knight Ridder 1996 deal The European Commission said on Friday it was probing a 1996 agreement between Financial Times Information Ltd, Dow Jones Information Publishing Inc and Knight Ridder Business Information, now called Dialog Corp Plc, to set up an electronic database for financial information. The European Union's competition watchdog said in a notice published in the bloc's Official Journal that the agreement was filed for regulatory clearance in June 1997. It added that it could fall under EU regulation 17 which bans anti-competitive agreements and abuse of a dominant position. The Commission called on interested parties to comment within a month. FT Information is controlled by Pearson Plc. Dialog was created in 1997 by the merger of M.A.I.D. Plc and Knight-Ridder Information Inc. The three financial news service providers agreed in September 1996 to cooperate to develop and maintain a new worldwide electronic database for historical business and financial information, the Commission said in the short notice.
Source: Businesswire 1/29/99
Mirror Group CEO is Out
As reported last week, disgruntled investors acted out their threats this week by requesting the resignation of chief executive David Montgomery. Institutional investors cited under-performance and “poor strategic decisions by its senior management” as reasons for the action. Chief among these were management’s decision to invest in the Independent newspaper and establish its Live TV subsidiary.
Source: Financial Times 1/29/99
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