McGraw-Hill Companies Inc. Earnings: Yet Another Quarter of Profitability

S&P 500 (NYSE:SPY) component McGraw-Hill Companies Inc. (NYSE:MHP) reported net income above Wall Street’s expectations for the fourth 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 Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the book publisher rose to $214 million (73 cents per share) vs. $153.8 million (50 cents per share) in the same quarter a year earlier. This marks a rise of 39.1% from the year earlier quarter.

Revenue: Rose 1.6% to $1.52 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: MHP reported adjusted net income of 63 cents per share. By that measure, the company beat the mean estimate of 57 cents per share. Analysts were expecting revenue of $1.55 billion.

Quoting Management: “In 2011, despite challenging market conditions, we recorded the second best year in our history from continuing operations for revenue, operating profit and earnings per share,” said Harold McGraw III, chairman, president and chief executive officer of The McGraw-Hill Companies. “A solid fourth quarter finish by S&P Capital IQ, S&P Indices, Platts and a market-beating performance in U.S. higher education enabled us to overcome volatile global credit markets and historically low funding levels in the U.S. elementary-high school market.”

Key Stats:

The company topped expectations last quarter after falling short of forecasts in the third quarter with net income of $1.21 versus a mean estimate of net income of $1.23 per share.

Net income has increased 10.8% year over year on average across the last five quarters. The biggest gain came in the most recent quarter, when income climbed 39.1% from the year earlier quarter.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved up from 43 cents a share to 44 cents over the last seven days. The average estimate hasn’t changed from $2.85 per share for the fiscal year.

Competitors to Watch: Reed Elsevier plc (NYSE:RUK), Thomson Reuters Corp. (NYSE:TRI), Reed Elsevier NV (NYSE:ENL), Gannett Co., Inc. (NYSE:GCI), Meredith Corporation (NYSE:MDP), Scholastic Corporation (NASDAQ:SCHL), Pearson PLC (NYSE:PSO), News Corporation (NASDAQ:NWSA), and The New York Times Company (NYSE:NYT).

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

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com