Houghton Mifflin Harcourt reported Q2 earnings, with net sales of $389 million, up from $357 million last quarter. “Billings” increased more dramatically, reflecting orders for their new core programs, at $489 million, up from $371 million a year ago, a new record for the company. As a result, the company increased its billings guidance modestly, with a new range of $1.53 billion to $1.61 billion.
Sales at the HMH Books & Media trade division rose $3 million in the quarter, to $39.1 million. Most of the gain, $2 million, was licensing income from the animated series Carmen Sandiego on Netflix (on top of $5.7 million of licensing revenue from that deal recorded in the first quarter). But the unit had a higher net loss in the quarter of ($5.4 million), compared to ($3.4 million) a year ago. That included an “unfavorable return experience,” higher cost of sales, and higher marketing and product management costs. Adjusted EBITDA was ($211,000), down from ($76,000) a year ago.
Costs increased companywide as well. The operating loss of ($30 million) was $15 million higher than a year ago, and the net loss was ($41 million), $18 million higher than a year ago. Investors seem focused on the losses rather than the gain in billings; the company’s stock, which has been languishing steadily, was down slightly this morning, at about $5.55 a share.