Plagued by weakness in advertising and the elementary and high school education markets, information-services company McGraw-Hill Cos. said Monday its profit and sales declined in the third quarter.
McGraw-Hill, which publishes textbooks and owns Standard & Poor's, said it earned $336.1 million, or $1.07 per share, marking a 14 percent decline from the same period a year earlier.
But that was still slightly better than the profit of $1.05 per share that analysts surveyed by Thomson Reuters were expecting.
Revenue declined 8 percent to $1.88 billion, below Wall Street's expectations of $1.94 billion.
The New York company said the quarter was marked by "sharp contrasts" — such as solid growth in the U.S. college and university market but a decline in the elementary-high school market. Education still brought in more than half of the quarter's revenue, $1 billion. But this showed a 12 percent drop from last year, as school districts tightened their budgets amid the recession. At the same time, a "surge in enrollments" in U.S. colleges and universities helped grow the company's higher education segment.
In financial services, the company said its Standard & Poor's Credit Market Services registered the first quarterly revenue increase since the third quarter of 2007.
McGraw-Hill's Platts energy-information service had a solid quarter, but it only partially offset declines in print and television advertising.
McGraw-Hill said it expects 2009 revenue will decline by 7 percent from last year. This is a steeper drop than the 5.5 percent to 6.5 percent drop the company had forecast earlier. It blamed weakening market conditions in education and advertising.
But thanks to cost-cutting efforts the company said it expects to meet the top end of its 2009 earnings estimate of $2.20 to $2.25 per share. Analysts are expecting a profit of $2.24 per share.
McGraw-Hill said it expects a gain of $5.9 million, or 2 cents per share, from the sale of BusinessWeek magazine to Bloomberg LP in the fourth quarter.
