HarperCollins Flying High on Earnings
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
Within a strong earnings report from parent company News Corp., book publisher HarperCollins once again defied conventional wisdom about the business with its seventh straight year of record profits under the direction of CEO Jane Friedman.
Along the way,the company has built itself to operating profit margins that most other publishers in this chronically low-margin business would find extremely hard to achieve. “I think that’s what I’m probably proudest of,” Ms. Friedman remarks. “Our operating margin has gone from 11.4% to 12.4% this year; we’re talking about percentages that haven’t been reported in trade publishing.”
For the full year, the unit earned $158 million – an increase of 19% from a year ago, on sales of $1.28 billion, up 10%. Fourth-quarter sales were up, reaching $267 million. Profits of $6 million were an improvement from a weak fourth quarter the previous year, though still low by historical standards, and it’s traditionally the company’s least profitable quarter.
Ms. Friedman called the Harper-Collins Australia unit a “blow out” for the quarter and a top performer for the year as well.While other big publishers like Random House, Penguin, and St. Martin’s struggle with dollar-dominated results for European parent companies that report in euros, the weak dollar actually works the other way for Harper, helping to bolster the compa ny’s numbers, particularly on the sales side in the last quarter.
The company’s single-biggest seller since it was launched in late 2002, Rick Warren’s “The Purpose Driven Life,” sold 1.6 million copies for the last quarter for Harper’s religious publishing division Zondervan. While that’s down considerably from 3.5 million copies the previous quarter, the company says the sales were “pretty much as expected,” and it looks for another lift as the next church-based 40 Days of Purpose campaign begins in early October.
Ms. Friedman noted, “We’re in a celebratory mood,” and indicated that the company was so pleased with the record results that it threw a party last month for 600 employees at the Boathouse in Central Park to celebrate.
