"Double-digit growth and increased share in the elementary-high school market inNet income for the first nine months was $872.9 million. and Revenue for the first nine months grew by 11.6% to $5.2 billion. Commenting on the outlook for the balance of the year the company stated:
the most important quarter of the year for education and solid performances in Financial Services even as the structured finance market deteriorated were key to our results," said Harold McGraw III, chairman, president and chief executive officer of The McGraw-Hill Companies. "The operating margin expanded in all
"We are still on course to produce double-digit earnings per share growth in 2007, as well as improved operating margins in the Financial Services and McGraw-Hill Education segments. For the fourth quarter, revenues and earnings will not match last year's results because of challenging conditions in the structured finance market and some softness in education."Highlights:
- Revenue for the McGraw-Hill School Education Group increased 11.2% in the third quarter to $670.8 million.
- Revenue for the McGraw-Hill Higher Education, Professional and International Group grew by 8.1% in the third quarter to $505.1 million
- Capturing 32% of the fast-growing state new adoption market was the key to this year's industry-leading performance by the McGraw-Hill School Education Group
- In professional markets, digital products, which include Access Medicine, Access Surgery, Access Emergency Medicine and Access Pharmacy, continue to attract a growing number of domestic and international subscribers. Our new digital iSpeak products, launched in April and now available in seven languages, are gaining traction
- "Revenue for this segment increased 12.5% in the third quarter to $759.6 million compared to the same period last year.
- Operating profit grew by 17.3% to $346.7 million. Foreign exchange rates positively affected revenue growth by $12.6 million and had an immaterial impact on operating profit growth.
- Double-digit growth in Standard & Poor's international fixed income markets, a strong performance by corporate and government ratings, and outstanding results from financial information products and services offset growing weakness in structured finance
- "Standard & Poor's data and information products and index services recorded solid gains. Increasing assets under management in exchange-traded funds, stepped up trading volume of derivative contracts, and growth in licensing fees, all linked to Standard & Poor's indices, contributed to the improvement.
- "Strong demand for data and information products is spurring growth. Capital IQ continues to add new customers and expand services to existing clients. A primary revenue driver has been the addition of new modules to the Capital IQ platform, including portfolio management tools and detailed fixed income information.
- Revenue for this segment increased 2.1% in the third quarter to $252.4 million compared to the same period last year.
- Operating profit grew by 35.8% to $18.6 million. In the third quarter of 2006, the segment incurred a pre-tax restructuring charge of $5.8 million.
- Foreign exchange rates did not have a material effect on revenue or operating profit growth.