Quarterly Round Up: HarperCollins, S&S, HMH, Bertelsmann
Four different publishers released financial reports over the past week, not all of which offered useful detail about their print, much less digital operations.
First up is Bertelsmann. Publishers Lunch has a story on B-mann’s first quarter trading up, and they note that it actually contained few details. I don’t see anything worth repeating; for that we would need to go back to PRH’s annual report of about a month ago.
Publishers Weekly reported at the end of March that:
Total revenue at Penguin Random House rose 25.2% in 2014 to 3.32 billion euros, while EBITDA increased 24.5% to 452 million euros, parent company Bertelsmann reported Tuesday morning. The increase, Bertelsmann said, was due primarily to the Penguin merger (completed July 1, 2013) and the purchase of Santillana Ediciones Generales (completed July 1, 2014). (2013 results do not include sales and earnings for Penguin for the first six months of that year).
The PW report did not include any specific details on digital, nor did Publishers Lunch. But PL did quote this from their copy of the report:
The significant risk for Penguin Random House is the risk of increasing margin pressure due to falling e-book prices and changes in terms of sale. In order to address this risk Penguin Random House is negotiating intensively with its customers and is monitoring market price developments.
That may or may not suggest that PRH wants to move to agency priced ebooks, but let’s be honest: we all assume that they are heading in that direction anyway.
HarperCollins already has, although that decision is not reflected in the quarterly report covered by PL earlier this week:
HarperCollins' parent company News Corp. reported third quarter fiscal year sales for the period ending March 31 after the close of the market on Tuesday. As you would expect overall sales rose at HarperCollins in the third quarter because the Harlequin acquisition makes them a bigger company, with sales of $402 million, up 14 percent on the quarter last year, while EBITDA increased 6 percent to $56 million.
But on a comparable basis, HarperCollins itself without the addition of Harlequin saw sales decline 5 percent, down $18 million to $336 million, as core EBITDA fell 8 percent, to a still robust $49 million. The company cited "lower contribution from the Divergent series" as a compared to a year ago.
They also reported that ebook sales dropped 3% during that quarter, with ebooks making up 22% of HC’s consumer revenues in the quarter.
Simon & Schuster, on the other hand, had a much better digital quarter. Their digital revenues were so good that they disproved any generic "Big Five cut their own throat with Agency" claim which one might make based on yesterday’s Author Earning Report.
S&S parent company CBS mentioned in their press release that digital accounted for 31% of revenues:
Publishing revenues for the first quarter of 2015 were $145 million compared with $153 million for the same prior-year period, reflecting lower print book sales. Digital revenues represented 31% of Publishing’s total revenues for the first quarter of 2015. Bestselling titles for the quarter include the 2014 release, All the Light We Cannot See by Anthony Doerr, and Get What’s Yours: The Secrets to Maxing Out Your Social Security by Laurence J. Kotlikoff, Philip Moeller, and Paul Solman.
Publishing operating income for the first quarter of 2015 of $12 million increased from $11 million in the first quarter of 2014 as the revenue decline was more than offset by lower selling and inventory costs.
eBooks accounted for 26.3% of revenues vs 25.4% a year ago.
And then there is HMH. Their press release was so complicated that I am uncertain what to quote. You can find it copied over at Talking New Media.
image by micurs