McGraw-Hill Announces The Elimination of 600 Positions, Third Quarter Earnings (posted 10/20)
Businessweek publisher, the McGraw-Hill Companies reported this week that it cut 600 positions in third quarter of this year, due to the integration of its elementary and secondary basal publishing operations and the outsourcing of some information technology functions, the company said in its quarterly earnings news release.
The company took a $15.4 million pre-tax restructuring charge ($9.7 million after tax) in its third earnings due to employee severance costs, the company said in the earnings release. Revenues for the third quarter were $2 billion, up 0.8 percent from the same period in 2005. The company's net income increased 0.3 percent for the quarter to $382.8 million, from a year earlier, while its earnings per share increased 6 percent to $1.06, according to a news release from the company.
"Total restructuring charges for 2006 will be approximately $31.4 million, or $0.06 per diluted share, primarily from the elimination of 700 positions," said CEO Harold McGraw III, in a statement. "These actions further streamline the organization and position us for a return to double-digit earnings growth in 2007."
The company also reported that revenue for its Business-to-Business Group increased by 9.9 percent to $221.3 million. The group includes J.D. Power and Associates, BusinessWeek, and products and services for the construction, aviation and energy industries.
McGraw, in his statement, said BusinessWeek.com continues to grow and produced more than 13 percent of BusinessWeek's total advertising revenue in the third quarter. The flagship McGraw-Hill title is believed to have laid 12 staffers off last month.
Total revenue for the first nine months of the year was $4.7 billion, up 4.4 percent from a year earlier, and total net income was $677.5 million, up 3.4 percent.