McGraw-Hill (NYSE:MHP) revealed on Tuesday an 8% decline in fourth-quarter profit, as strong performance in its financial-services business could not wholly offset weaker education sales.
The New York-based company posted net income of $153.8 million, or 50 cents a share, compared with $167.3 million, or 53 cents a share, in the same quarter last year.
Excluding costs related to restructuring and for excess space in a New York office, McGraw-Hill, which operates under the Standard & Poor’s brand, earned 55 cents a share, ahead of average analyst estimates polled by Thomson Reuters of 53 cents.
Revenue for the provider of information services and products to the education, financial services and business information markets was $1.52 billion, up 4.2% from $1.46 billion a year ago, narrowly beating the Street’s view of $1.51 billion cents.
“Double-digit EPS growth and the maintenance of a rock-solid financial position were the hallmarks of our performance in 2010,” said Harold McGraw III, the company’s chief executive. “Double-digit growth at Standard & Poor's Credit Market Services and a fine performance in global energy markets by Platts also helped offset fourth quarter softness in education markets.”
Sales in its financial-services segment climbed 13% to $778.5 million, helped by Standard & Poor’s market services and investment revenue, and a 23% gain in transaction revenue.
McGraw-Hill achieved record worldwide corporate high-yield new issues dollar volume, and saw a surge in bank loan ratings and the public finance market.
The gains helped offset weaker performance in its education segment, which fell 31.7%, due primarily to lower territory sales in its school education group, and a year ago federal stimulus benefit.
Looking ahead, the company said it looks forward to continued growth in 2011, with earnings in the range of $2.79 to $2.89 a share. Analyst are expecting earnings of $2.89 a share.