Harry Potter worked his magic again. Scholastic
The company lost $0.07 a share, but that's far better than the $0.47 loss that analysts expected. The company's first quarter is typically weak, too, since it falls before the school season across most of the country, which means that book clubs and their associated fares are not yet in full swing. Since the beginning of this month, in contrast, I've already received three book-club order forms from my kids' school.
Besides, the quarterly numbers get much better. In the children's-book publishing and distribution segment, revenue more than tripled to $342.5 million, with the final Harry Potter book accounting for $240 million of the total. It's a similar story in the international segment, with revenue jumping 17% on a constant currency basis and the operating loss chopped in half, to $2.7 million.
Now, I have nothing against the wizard, but keep in mind that this kind of showing is not going to reoccur in the future. Harry Potter is all grown up and has left the building.
Author J.K. Rowling is writing a new series -- rumored to be a detective story. But the details are not out yet, and I don't know whether Scholastic will have a hand in it, or even whether it will be geared toward children. In any event, it would be hard to duplicate the success of the Potter series. Blockbusters like this, which affect so many companies -- including booksellers Barnes & Noble
The company did reaffirm its guidance for the year of $2.35-$2.85 a share. That's a pretty wide range, but we can at least be sure that Scholastic will continue publishing its educational and children's books, including the more mundane but reliable Clifford the Big Red Dog series. There's nothing wrong with that -- just don't expect future results to take off and fly away.