Total revenue at McGraw-Hill Education rose 1.8%, to $565 million, in the second quarter ended June 30 with gains in the higher education/professional/international segment offsetting declines in the school education group. Operating profit increased to $51.6 million compared to $21.0 million in last year’s second quarter which included a pre-tax restructuring charge of $11.6 million.
Revenue in the school group fell 4.0%, to $324.9 million, with results hurt by state budget problems that have forced school districts to delay of cancel textbook purchases. Fewer adoption opportunities, declines in sales to open territories and delays in shipping orders to Texas also dragged down sales. Given the weak state funding situation MHE trimmed its estimate for the year's state new adoption market to a range of $825 million to $875 million from $875 million to $925 million and lowered forecast for overall growth in the elhi market to 4% to 6% compared to the previous forecast of a 6% to 7% increase.
Sales in the higher education/professional/international group were much better, up 10.8%, to $240.1 million. Enrollment gains and increases in digital products and services continued to lead the group. Online homework management, assessment and tutoring products for students, all recorded double-digit revenue increases in the second quarter, MHE said, and there also was double-digit growth in the Science, Engineering and Math; Humanities, Social Sciences and Languages; and Business and Economics imprints. The total market is expected to grow 5% to 7% this year.
In professional publishing, the e-book market continued to expand and there were indications of an improving trend in traditional retail channels, MHE said. Reflecting the impact of favorable foreign exchange rates, revenue increased modestly in international markets. Higher education sales in Southeast Asia, South Korea and Mexico contributed to the performance.
For the first half of 2010, sales for MHE were up 1.7%, to $882.2 million and the net loss was cut to $10.2 million from $55.6 million a figure that included the one-time restructuring charges.
