MediaWeek (Vol 2, No 45): Money Issue

Several publishers reported earnings this week.

Simon & Schuster (CBS)

Publishing revenues for the third quarter of 2009 increased 2% to $230.4 million from $225.0 million for the same prior-year period reflecting the timing of the release of titles. Best-selling titles in the third quarter of 2009 included Arguing with Idiots by Glenn Beck and Her Fearful Symmetry by Audrey Niffenegger. In constant dollars, Publishing revenues increased 4% over the same prior-year period.

OIBDA for the third quarter of 2009 increased 10% to $28.4 million from $25.8 million for the same quarter last year and operating income increased 14% to $26.6 million from $23.4 million for the same prior-year period primarily due to revenue growth, partially offset by higher write-offs of advances for author royalties.

Hachette (Reuters) and The Bookseller:

Publishing revenues for the nine months to end September 2009 were €1,694m, up 8.3% on a reported basis and 8.8% on a like-for-like basis. Sales grew again in the third quarter of 2009, rising by 5.1% on a like-for-like basis. Other "main growth drivers" in the US included True Compass by Edward Kennedy, Say You're One of Them by Uwem Akpan, Lies My Mother Never Told Me by Kaylie Jones and Malcolm Gladwell's Outliers.

There was further sales growth in the United Kingdom but Spain reported a slight dip, mainly due to lower sales in education, Lagardère said. Lagardère said its publishing business faced "a particularly challenging fourth-quarter comparative", as the success of the Stephenie Meyer saga drove like-for-like sales growth to 6% in the fourth quarter of 2008.

ThomsonReuters (Press Release):

Glocer commented that 'the worse may be over'
Revenues from ongoing businesses were $3.2 billion, a decrease of 2% before currency and 4% after currency. IFRS revenues were down 4% after currency against the prior year period.

Underlying operating profit was up 3% to $711 million, with the related margin up 140 basis points, driven by the benefit of currency, integration-related savings and a continued commitment to strong cost management.

Adjusted earnings per share were $0.43 compared with $0.47 in the third quarter of 2008. The decline was due to higher integration-related spending, which is included in adjusted earnings but not underlying operating profit.

Borders announced that they would close the remaining mall stores by early 2010 (PR):

As part of Borders Group's ongoing strategy to right-size its Waldenbooks Specialty Retail segment and emerge with a smaller, more profitable mall chain in fiscal 2010, the retailer will close approximately 200 mall stores in January, leaving approximately 130 mall-based locations open. The list {of closures} is not final and is subject to change pending finalization of agreements over the coming weeks. Importantly, today's announcement regarding the mall business does not include Borders superstores or the company's seasonal mall kiosk business, which includes over 500 Day by Day Calendar Co. units, among other mall-based retail concepts.

Newscorp reported their results including improved results at Harpercollins (PR):

HarperCollins operating income of $20 million increased $17 million versus the same period a year ago due to higher sales at the Children's and General Books divisions, as well as reduced operating expenses from restructuring efforts in the prior year. First quarter results included strong sales of Where the Wild Things Are by Maurice Sendak, The Vampire Diaries by L.J. Smith and the paperback edition of The Story of Edgar Sawtelle by David Wroblewski. During the quarter, HarperCollins had 47 books on The New York Times bestseller list, including four books that reached the number 1 spot.

Torstar the parent of Harlequin reported (PR):

Book Publishing operating profit was $22.9 million in the third quarter of 2009, up $4.2 million from $18.7 million in the third quarter of 2008, including $2.0 million from the impact of foreign exchange. Year to date, Book Publishing operating profit was $63.1 million, up $9.9 million from $53.2 million in the first nine months of 2008, including $5.1 million from the favourable impact of foreign exchange. Underlying results were up in North America Direct-To-Consumer and down in North America Retail for both the third quarter and year to date. Overseas was down in the quarter but up year to date.