Friday, August 10, 2012

PublishersLunch


News Corp. reported fourth quarter earnings after the close of the market Wednesday. As usual, the release says almost nothing about their book publishing results and does not mention Harper by name, though the newspaper-dominated "publishing" division saw operating income fall almost in half, at $139 million for the quarter compared to $270 million a year ago.
The publishing results "reflect a litigation settlement charge related to sales of e-books," but the report does not disclose the amount. Part of the $131 million drop in publishing income is due to "a $57 million charge related to the costs of the ongoing investigations initiated upon the closure of the News of the World." Regardless of the charge taken due to the ebook settlement, Harper tells us they do not anticipate any future charges related to those lawsuits.
The legal losses pale next to News Corp.'s $2.8 billion non-cash impairment charge -- $1.5 billion in "goodwill" and another $1.3 billion in "indefinite-lived intangibles" -- "principally related to the publishing businesses," particularly their Australian newspapers, as they prepare to spin the newspaper and book publishing assets into a separate company.
Harper said in a brief statement that it "had a strong fourth quarter" with the company "up versus the prior year for both the quarter and full-year and saw solid performance across all divisions...excluding one-time legal fees." They added that ebook sales comprised 14 percent of worldwide sales, up from 12 percent at the end of fiscal 2011.
Release
For their fiscal first quarter ending June 30, Indigo reported sales from continuing operations of C$186.5 million, down 1.8 percent from a year ago, with a net loss of C$5.5 million, significantly less than the $12 million the company lost a year ago. The revenue drop was primarily "driven by lower Kobo eReader sales when compared to the strong launch of the Kobo Touch in the same period last year" and by Indigo closing 8 stores over the past year. The narrowed net loss came about thanks to "improvements in net margins and lower operating expenses" and no longer having Kobo's losses on the books.
Superstore comps dropped 0.9 percent but smaller-format stores really benefited from sales of the FIFTY SHADES and HUNGER GAMES TRILOGY, increasing by 6 percent. Online sales decreased 1.1 percent compared to a year ago, at $17.8 million, also due to lower Kobo device sales.
In a statement Indigo ceo Heather Reisman celebrated their success in selling things other than books: "We are very pleased to see continued double digit growth in our general merchandise businesses as we expand our exciting gift, lifestyle and IndigoKids categories. We're also happy to see positive comp sales in our small format stores driven by the strong book titles this quarter and the expansion of some general merchandise to our smaller stores."
Release

No comments: