Shares rose as much as 12.5 percent. Chief Executive Harold McGraw said he expects the U.S. economy and capital markets to show signs of recovery in theDespite these full year numbers, the company's results were significantly impacted by a slow fourth quarter - mainly due to the slow-down in credit market - and net income was almost half the level the company recorded in 2006. Revenues were off 1.5% versus 2006.
second half of 2008, though a "housing recession" will likely persist all year. McGraw-Hill also publishes school textbooks and magazines such as BusinessWeek,
and owns researcher J.D. Power & Associates.
Other highlights from the press release:
Education: "Revenue for this segment in 2007 increased 7.2% to $2.7 billion compared to 2006. Operating profit in 2007 grew by 21.5% to $400 million. Included in the segment's 2007 operating profit is a pre-tax restructuring charge of $16.3 million in the fourth quarter for severance relating to a workforce reduction of 304 positions. In 2006, there were pre- tax restructuring charges of $5.6 million in the third quarter and $10.4 million in the fourth quarter.
Financial Services: "Revenue for this segment in 2007 increased by 10.9% to $3.0 billion compared to last year. Operating profit grew by 13.1% to $1.4 billion. Included in the segment's operating profit is a pre-tax gain of $17.3 million on the divestiture of a mutual fund data business in the first quarter and an $18.8 million pre-tax restructuring charge in the fourth quarter consisting mostly of severance relating to a workforce reduction of 172 positions, driven by the current business environment, as well as the consolidation of business support functions.
Information & Media: "Revenue for this segment in 2007 increased 3.6% to $1.0 billion compared to last year. Operating profit grew 27.2% to $63.5 million. Included in the segment's 2007 operating profit is a pre-tax restructuring charge of $6.7 million in the fourth quarter for severance relating to a workforce reduction of 114 positions. In 2006, there were pre- tax restructuring charges of $5.7 million in the third quarter and $3.0 million in the fourth quarter. The operating margin for 2007 was 6.2% versus 5.1% in 2006. Foreign exchange rates did not have a material effect on revenue, but reduced operating profit growth by $4.6 million.
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