McGraw-Hill, owner of BusinessWeek magazine and Standard & Poor's ratings and index business, said Tuesday that first-quarter profit nearly doubled on strong results in its financial services and education segments.
“It’s hitting on all cylinders,” Terry McGraw, chairman and CEO, said in an interview on CNBC after the earnings were released.
Net income leaped to $143.8 million, or 40 cents per share, compared with $74.2 million, or 20 cents per share, in the previous year. Analysts polled by Thomson Financial were expecting earnings of 31 cents per share.
The current quarter's results included a $10.3 million, or 3 cents per share gain on the sale of a mutual fund data business.
The prior-year's results included a one-time charge of 4 cents per share for the elimination of a stock option program.
Revenue for the quarter rose 14 percent to $1.3 billion from $1.14 billion a year ago. Analysts had estimated sales at $1.24 billion.
Financial services revenue climbed 21.5 percent to $728.9 million. S&P had revenue increases of more than 30 percent for its credit ratings and services both domestically and overseas.
Education segment revenue rose 5.6 percent to $331.7 million. Revenue also increased 4.1 percent to $235.9 million in McGraw-Hill's information and media
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.