HarperCollins followed up a solid first quarter ended September 30, 2018, when earnings jumped 42%, by reporting a 13% rise in EBITDA (earnings before interest, taxes, depreciation, and amortization) in the quarter ended December 31, 2018, over the comparable period a year ago. Profit in the most recent quarter (the second period of fiscal 2019) was $88 million, up from $78 million a year ago. Revenue in the quarter increased 6% over 2018, to $496 million.
In a statement, Robert Thomson, CEO of HC parent company News Corp, said the publisher’s gains were due in part to “the burgeoning of [sales] of digital audio.” Sales of digital audio jumped 58% over last year's second quarter, and News Corp reported that digital sales rose 12% in the period, as softness in e-book sales was offset by the gains in audio. Digital sales represented 17% of consumer revenue in the quarter, up from 16% a year ago.
Looking at its segments and titles, News Corp reported that sales were up in the general books group as well as in its Christian publishing division. Among the company’s top sellers were Homebody by Joanna Gaines and The Next Person You Meet in Heaven by Mitch Albom, as well as the continued success of Girl Wash Your Face by Rachel Hollis.
For the first six months of fiscal 2019, HC’s EBITDA was up 24% over the first half of fiscal 2018, to $156 million. Sales rose 5%, to $914 million.
News head Thomson has long criticized the power of Amazon to bend markets to their will. In a conference call discussing second quarter results, Thomson took aim at Audible, without naming the big technology company's division.
"We are in a world of exponential evolution, in which dominant players have the potential to manipulate markets for data, products, advertising, news and ideas. There is no doubt that some of these companies are arbitraging algorithmic ambiguity and hoping that regulators do not fully appreciate or define their dominance in certain sectors," Thomson began, then added: "When one company controls much of the U.S. consumer audiobook market and has its own products in that market and can tweak its algorithm at will, the potential for abuse is almost limitless. It is clear that there has been a regulatory awakening and the time has come for a regulatory reckoning."
