Total revenue at HarperCollins rose 5% for the first quarter ended September 30, to $364 million, and operating income inched up from $59 million to $60 million. Harper CEO Jane Friedman said she was satisfied with the company's performance, since the most recent period "was not the easiest time for the book business."
Sales in North America were up, led by HC's Zondervan division, which continues to benefit from The Purpose-Driven Life. Sales in HC's children's group rose, driven by The Grim Grotto, the latest in the Lemony Snicket series and which now has close to one million copies in print. Sales in the adult group were "about flat," Friedman said. Strong sales of Gen. Tommy Franks's American Soldier and The Proper Care and Feeding of Husbands by Dr. Laura Schlessinger were offset by a steep drop in sales of Dr. Atkins titles, which were at their height in last year's first quarter, Friedman said. Sales and earnings in the U.S. were also hurt by high returns, which, Friedman said, "came in all formats and from all channels."
In Canada, results were "way up," Friedman said, due partly to lower returns.
Although Friedman acknowledged that the U.S. trade operation was "hurting a little," she wasn't worried about the long term. October was a strong month, led by Grotto and other Snicket backlist titles, and Friedman is confident the release of the first Snicket film in December will keep sales strong through the holidays. She believes President Bush's reelection could give a new boost to American Soldier, and theorized that with the election over, "fiction could have a big run." She expects big things from new releases by Janet Evanovich, Tony Hillerman and Michael Crichton. In the early part of the current quarter, Friedman said, there have been no unpleasant surprises. "The books we expected to pop have popped," she said.
To help HC implement its Publishing+ strategy across the company, Rob Zaffiris, v-p worldwide finance, has been promoted to senior v-p, finance and strategic new business development. Although Zaffiris will keep some corporate financial responsibilities, the majority of his time will be spent exploring strategic initiatives for internal growth as well as pursuing acquisitions and joint ventures.
