Earnings Preview: McGraw-Hill (MHP)

The McGraw-Hill Companies, Inc. (MHP), the publisher and provider of financial information and media services, is scheduled to report its second-quarter 2010 financial results, before the market opens on Friday, July 23, 2010.

First-Quarter 2010, a Synopsis

McGraw-Hill reported better-than-expected first-quarter 2010 results, primarily driven by a recovery in global bond markets, strong performance in U.S. higher education and global energy information markets.

The company recorded a robust 63.9% growth in net income to $103.3 million or 33 cents per share from $63.0 million, or 20 cents per share, in the year-ago period. The quarterly results also topped the Zacks Consensus Estimate of 25 cents.

Total revenue for the quarter rose 3.7% year over year to $1,190.4 million, mainly due to growth in the Education and Financial Services segments, offset to a certain extent by a decline in its Information & Media segment.

Second-Quarter 2010 Consensus

Analysts surveyed by Zacks, expect McGraw-Hill to post second-quarter 2010 earnings of 60 cents a share. The current Zacks Consensus Estimate represents a year-over-year growth of 3.4%.

Of the 8 analysts covering the stock, 2 analysts have revised their estimates downwards in the last 30 days, pushing down the Zacks Consensus Estimate to 60 cents from 61 cents estimated earlier. However, in the last 7 days, only one analyst has lowered his estimate, leaving the consensus unchanged. The estimates in the current Zacks Consensus for the quarter range from a low of 57 cents to a high of 64 cents.
The analysts remained concerned about how the financial reform will impact S&P’s (a division of McGraw-Hill) position in the structured finance market.

Earnings Surprise History

With respect to earnings surprises, McGraw-Hill has topped the Zacks Consensus Estimate over the last four quarters in the range from 0.9% to 32.0%. The average remained at 16.0%. This suggests that Manpower has outperformed the Zacks Consensus Estimate by an average of 16.0% in the last four quarters.

MCGRAW-HILL COS (MHP): Free Stock Analysis Report
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