updated 10/26/2009 12:47:02 PM ET 2009-10-26T16:47:02

Plagued by weakness in advertising and the elementary and high school education markets, information-services company McGraw-Hill Cos. said Monday its profit and sales declined in the third quarter.

McGraw-Hill, which publishes textbooks and owns Standard & Poor's, said it earned $336.1 million, or $1.07 per share, marking a 14 percent decline from the same period a year earlier.

But that was still slightly better than the profit of $1.05 per share that analysts surveyed by Thomson Reuters were expecting.

Revenue declined 8 percent to $1.88 billion, below Wall Street's expectations of $1.94 billion.

The New York company said the quarter was marked by "sharp contrasts" — such as solid growth in the U.S. college and university market but a decline in the elementary-high school market. Education still brought in more than half of the quarter's revenue, $1 billion. But this showed a 12 percent drop from last year, as school districts tightened their budgets amid the recession. At the same time, a "surge in enrollments" in U.S. colleges and universities helped grow the company's higher education segment.

In financial services, the company said its Standard & Poor's Credit Market Services registered the first quarterly revenue increase since the third quarter of 2007.

McGraw-Hill's Platts energy-information service had a solid quarter, but it only partially offset declines in print and television advertising.

McGraw-Hill said it expects 2009 revenue will decline by 7 percent from last year. This is a steeper drop than the 5.5 percent to 6.5 percent drop the company had forecast earlier. It blamed weakening market conditions in education and advertising.

But thanks to cost-cutting efforts the company said it expects to meet the top end of its 2009 earnings estimate of $2.20 to $2.25 per share. Analysts are expecting a profit of $2.24 per share.

McGraw-Hill said it expects a gain of $5.9 million, or 2 cents per share, from the sale of BusinessWeek magazine to Bloomberg LP in the fourth quarter.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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