Editor's note: In the first version of this article published on July 27, McGraw-Hill's Education Unit was characterized as "very much in decline." This was not accurate, and the article has been updated to reflect this. We apologize for the mistake.
It's been a few years since I graced the halls of McGraw-Hill's
The S&P Equity Group, which is run by the dynamic hand of Ken Shea, makes up a small, valuable chunk of McGraw-Hill's financial machine. McGraw-Hill attributed its 15% growth in second-quarter revenues to "strength in domestic and international ratings and improving performance in equity services." This record revenue, combined with an impressive 25% increase in the operating profit at financial services, pushed McGraw-Hill's earnings of $0.86 per share well ahead of analysts' expectations ($0.81 per share) and last year's number ($0.74).
Many investors hear the name McGraw-Hill and immediately think books and publishing. The company's Education Unit's revenues fell 2.1% in the second quarter, although the unit did manage to produce a 2.6% in operating profit mainly because of favorable currency translations. Over the first six months of the year, Financial Services revenue accounted for 45% of total revenues (42% last year), while Education revenue makes up 38% of revenues (40% last year). This subtle shift to the double-digit growing Financial Services businesses should benefit the company's results in the future.
It's no wonder that McGraw-Hill's mature Education Unit's growth has slowed recently, with competitors such as Pearson PLC
Fool contributor Phil Wohl spent more than 12 years on Wall Street and now concentrates his writing on more fictional characters. He has no stake in any firm mentioned above, but he did work at Standard & Poor's (a division of McGraw-Hill) for more than eight years.