McGraw Says Earnings Boosted by Financial Services, Education
Terry McGraw, chairman and CEO of McGraw-Hill, told CNBC’s “Squawk Box” that first quarter earnings growth was led by a strong performance in financial services and education.
“It’s hitting on all cylinders,” McGraw said Tuesday.
Earnings rose to 40 cents a share in the first quarter of 2007 compared with 20 cents for the same period last year. The consensus Wall Street estimate was 31 cents a share. The publishing and information company, which owns Standard & Poor’s and Business Week, earned $143.8 million on revenue of $1.3 billion.
First quarter 2007 earnings included a gain of three cents a share on the sale of a mutual fund data business in March. The first quarter of 2006 included a one-time charge of 4 cents a share for the elimination of a stock option program.
Financial services revenue grew 21.5% to $728.9 million.
Revenue for the McGraw-Hill School Education Group fell 1.2% in the first quarter to $144.8 million. But revenue for the Higher Education, Professional and International Group increased by 11.5% to $186.9 million.
McGraw called the ad market “pretty flat” and said ad pages in Business Week declined about 3% in the first quarter of 2007 from the same period a year ago.
“We’re hoping to see some pickup,” he said. “But I don’t think we’re going to see substantive pickup there. I think where we’re seeing it is in the enormous growth on the online side.”
He gave no figures for online ad revenue. McGraw said he wasn’t worried about the rest of the year.
“We still see (overall economic) growth at 2.4% for the year, which is about where it should be for mid-cycle,” he said.