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McGraw-Hill beats Street
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July 15, 1999: 10:19 a.m. ET
2Q net income jumps 15.6% on back of financial services, publishing
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NEW YORK (CNNfn) - McGraw-Hill Cos. posted second-quarter earnings Thursday that beat Wall Street expectations by a penny, bolstered by strong results in its financial services and educational and professional publishing businesses plus advertising gains at its magazine Business Week.
The multimedia publishing and information services company, which owns Standard & Poor's, reported net income of $90 million, or 45 cents per diluted share, up 15.6 percent from its year-ago net of $77.8 million, or 39 cents a diluted share.
Analysts' consensus estimate was 44 cents a share, according to the forecast-tracking firm First Call.
Revenue for the quarter grew 4.7 percent to $922.7 million, while operating income rose 12.2 percent to $157.9 million.
Among the company's segments, revenue in financial services rose 11.6 percent to $314.9 million as its operating profits grew 11 percent to $95.7 million due to a strong performance by Standard & Poor's.
"S&P is growing in every area across the board," McGraw-Hill Chairman and CEO Harold McGraw III told CNNfn.
The educational and professional publishing unit's revenue also grew, rising 4.8 percent to $371.1 million.
There was some weakness, however, in McGraw-Hill's Information and Media Services, where revenue fell 3.3 percent to $236.7 million due in large part to the divestiture of the Information, Technology and Communications Group in the second quarter of 1998, as well as softness in local market TV sales and in some of the company's energy and petrochemical publications.
Nevertheless, the unit's operating profit increased 7.7 percent, helped in part by an 8.4 percent boost in advertising pages for Business Week.
Growth ahead, says CEO
For the first half of 1999, McGraw-Hill's net income rose 16.8 percent to $114.5 million, or 57 cents a diluted share, compared with 49 cents a share a year ago. Revenue increased 3.4 percent to $1.64 billion.
Noting how pleased he was with McGraw-Hill's results and the fact that the company has posted strong earnings for the past seven years, McGraw said, "The consistency and sustainability of earnings is what's very important to us."
And he anticipates more growth ahead. The financial services, educational publishing, and information and media services, he said, are "very fast-growing markets. We sit in the heart of these markets. Our growth potential here is very strong."
In the company's statement, he said, "We … look forward to meeting our goals in 1999."
McGraw-Hill (MHP) stock rose 1-3/16 to 51-9/16 in early morning trade Thursday, slightly nearer to its 52-week high of 60-3/4 than to the 52-week low of 36-1/8. 
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