McGraw-Hill has shown a sharp drop in profits and earnings:
McGraw-Hill Cos.’ second-quarter earnings fell 23% amid higher restructuring charges and continued weakness in all its businesses.
The company cut the top end of its full-year earnings forecast and reduced its revenue outlook, now projecting a 5.5% to 6.5% decrease. It lowered that forecast in April to a 4% to 5% revenue decline.
The textbook publisher and financial-information provider has announced a number of restructuring moves in recent weeks. It said earlier this month it planned to combine some of its educational publishing businesses into a comprehensive pre-K-12 segment, cutting 550 jobs in the process. It also announced it would put its unprofitable BusinessWeek magazine on the block.
Chairman and Chief Executive Harold McGraw III on Tuesday said, “Strength in U.S. higher education, the global corporate bond market and at Platts, our worldwide energy information service, were offset by softness in the elementary-school market, structured finance and advertising.”
Said another way, they’re hoping that the funds for higher education included in the fiscal stimulus package turn into a windfall for the company.
Most people think of McGraw-Hill as just a publishing company but that’s not the half of it. They also own Standard & Poors, the credit rating company, and J. D. Power, the business intelligence company. All of the segments of the company are suffering right now. Standard & Poors has suffered a loss of repute as a consequence of the financial crisis in which they are one of the primary culprits, J. D. Power has slowed as retail sales do, and McGraw-Hill has had a loss of orders as state and local governments cut back on textbook spending.
Years ago McGraw-Hill was a client of mine. I have fond memories of their gorgeous old line offices in Manhattan, eating in the executive dining room, and making a presentation to the J. D. Power cats on the structure of an industry as they prepared their first ever guide to the industry, for which my associates and I were primary contributors.
