First quarter earnings for the period ended September 30, rose 14% over the comparable quarter a year ago at HarperCollins, despite a 5% revenue decline.
According to HC parent company News Corp, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $48 million in the most recent quarter, up from $42 million a year ago. Revenue was $389 million, down from $409 million in the same quarter from 2015.
News Corp attributed the revenue drop to difficult comparisons to last summer’s runaway hit, Go Set a Watchman which generated $32 million in revenue in the first quarter of fiscal 2016 as well as the negative impact of currency fluctuations. HC was able to make up for the absence of Watchman sales, somewhat, with strong performances by a number of frontlist books, including Hillbilly Elegy,The Black Widow, and Jesus Always. Overall, News said print sales were up in the quarter.
Brian Murray, CEO of HC, pointed to the success of Hillbilly Elegy, written by J.D. Vance and released by the publisher in June, as a particular bright spot. He said that the narrative nonfiction work proved “an unexpected success,” adding that the book has sold 300,000 copies to date.
In a conference call discussing results, News CEO Robert Thomson, said the success of Hillbilly Elegy and Jesus Calling was the result of HC looking for titles that "resonate beyond the traditional elites."
The expansion of HC’s global footprint also continued in the quarter. HC has re-branded all of the former Harlequin international offices as HarperCollins and has released more than 400 HC titles through those offices. Murray has high hopes for The Case of Beasts, a behind-the-scenes look at the making of the forthcoming film written by J.K. Rowling Fantastic Beasts and Where to Find Them, which will be released as part of HC’s global publishing program this year.
Digital sales at the publisher accounted for 20% of consumer revenue in the most recent quarter, the same level as in the first period of fiscal 2016. But with overall HC revenue falling, digital sales dropped about 6% in the period, to approximately $77 million.
Both Murray and News Corp executives suggested that they expect HC to perform well in the near future. News CFO Bedi Singh said the publisher will have “favorable comparisons” going forward. Among the books HC has high expectations for is Settle for More by Fox News anchor Megyn Kelly which will be released Nov. 15.
This story has been updated with information from News Corp's conference call.
