With revenue in both its major operating groups falling, first-quarter sales at McGraw-Hill Education declined 4.6%, to $302.7 million, and the operating loss increased by 22.2%, to $75.5 million. In addition to lower revenue, parent company McGraw-Hill Cos. attributed the deeper loss to increased investments for digital infrastructure and product development.
In the school education group, sales fell 4.8%, to $106.2 million, as small gains in adoption areas were offset by a decline in sales to open territories.
Sales in the higher education/professional/international group declined 4.5%, to $196.5 million, with the company noting that sales of digital products were a bright spot. The higher education unit had modest gains in the period, but sales were soft in the professional and international segments. In professional, double-digit growth for digital products and services were offset by “lackluster” results in the traditional retail channel, MHC said. Its bestselling e-books in the quarter covered a broad range: The Official Guide to the TOEFL, The Handbook of Fixed Income Securities, Crucial Conversations, Current Medical Diagnosis and Treatment 2011, 50th Edition, and How to Talk to Anyone, 2nd Edition.
Revenue declined in international markets primarily as a result of shortfalls in the Middle East and Africa that MHC said were related to unsettled conditions in key countries within the region in the first quarter.
