McGraw-Hill Companies Earnings: Three Straight Quarters of This Metric Snapped

S&P 500 (NYSE:SPY) component McGraw-Hill Companies Inc. (NYSE:MHP) reported its results for the third quarter. McGraw-Hill produces a range of information products and services for the education, financial services, and business information markets.

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McGraw-Hill Companies Inc. Earnings Cheat Sheet

Results: Net income for the book publishing fell to $314 million ($1.10 per share) vs. $365.6 million ($1.21 per share) a year earlier. This is a decline of 14.1% from the year-earlier quarter.

Revenue: Rose 2.4% to $1.95 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: McGraw-Hill Companies Inc. reported adjusted net income of $1.33 per share. By that measure, the company beat the mean estimate of $1.30 per share. It beat the average revenue estimate of $1.59 billion.

Quoting Management: “We are pleased by the success of our Growth and Value Plan and the strong results of the McGraw-Hill Financial businesses. McGraw-Hill Financial, which now includes the newly formed S&P Dow Jones Indices joint venture, achieved double-digit growth in revenue and adjusted operating profit in the quarter. McGraw-Hill Education, under the new leadership of Buzz Waterhouse, managed through the weakest K-12 market in a decade while accelerating digital products and services and building world-class capabilities to drive global growth,” said Harold McGraw III, chairman, president, and chief executive officer of The McGraw-Hill Companies.

Key Stats:

The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by 9 cents in the second quarter, by 2 cents in the first quarter, and by 6 cents in the fourth quarter of the last fiscal year.

After three quarters of profit increases, the company reported a profit increase last quarter. Net income rose 2.3% in the second quarter from the year earlier, while the figure rose 2.5% in the first quarter and 39.4% in the fourth quarter of the last fiscal year.

Revenue rose last quarter after seeing a drop the quarter before. Revenue fell 2.1% to $1.55 billion in the second quarter from the year earlier.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past month, the average estimate for the fourth quarter has gone up from 70 cents per share to 71 cents. The average estimate for the fiscal year has risen to $3.40 per share from $3.35 in the past month.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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