Revenue at McGraw-Hill Education declined 2%, to $296 million, in the first quarter ended March 31, but the operating loss was cut to $65 million from $75 million in last year’s first period, parent company McGraw-Hill Cos. reported this morning. The drop in revenue was attributed to continued weakness in the school group where sales fell 10%, partially offset by a 2% revenue gain in the higher education, professional, international group. The improvement in operating loss was due in part to a fourth quarter restructuring that cut 540 jobs.
In the HPI segment, revenue rose in the higher education and professional divisions, while the international division had modest revenue decline in most geographies, MHC said. The makeup of the business continues to evolve to a more digital business and in the professional group nearly 40% of its revenue came from digital products and services, representing a 33% growth in digital e-books, licensing, and subscriptions revenue. The professional unit now offers more than 6,000 e-book titles.
The 10% drop in the school group was due mainly to the decline in state funding.
In a statement, chairman Terry McGraw said “I am encouraged by recent growth trends in Higher Education and Professional. In addition, our cost reduction efforts are offsetting government funding challenges in the elementary-high school portion of our education business.” MHC said it remains on track to split off the MHE group into its own company by the end of 2012.
